Phnom Penh Post, Issue 17 / 01, January 11 - 23, 2008
Foreign investors may not need to wait for the stock market in 2009 if they want a piece of Cambodia's economy.
The government is on the verge of changing the property ownership laws so that foreigners will be able to buy real estate in the country and own it outright.
Although current law prohibits foreigners from actually holding title to land in Cambodia, the National Assembly is considering an amendment to the law that could be approved soon, said Nuth Narang, Secretary of State at the Ministry of Land Management, Urban Planning and Construction.
"Local developers have a massive interest in seeing the law change. Cambodia is open for business now. There is huge demand, foreigners would buy property," said Matthew Rendall, a lawyer with the investment advisors Sciaroni and Associates.
Although it was not clear what restrictions Cambodia might put on foreign property investment, Rendall said there is no downside to changing the law. Cambodia has "nothing to lose," he said.
Developers contacted by the Post said a change in the law would change the marketing environment for developers in Cambodia.
Marketing director Nhem Sothea at Grand Phnom Penh International City said changing the law would make it "much easier to sell property here."
"There is a large Korean market -they want to come here and retire and we could access that market better with a change to the law."
Backed by Indonesia's Cinputra, through a local partner RCAF Gen. Ke Kim Yan, the International City is developing 260 hectares 20 minutes northwest of the city center into a gated community.
Nick Chandler, sales and marketing director for Brocon, which buys colonial buildings in Cambodia and rehabilitates the apartments for sale to foreign investors, said a change in the law would create huge demand.
"There is a real buzz regarding Cambodia," he said. "They have had three years of double digit growth-9 percent this year. A lot of people see that and those people see property as the best and most stable way to get into this market."
Narang said the ministry is discussing whether changing the law "will be beneficial to the economy." "We need to assess how best to go about this," said Narang. He added that the ministry is seen as favoring the amendment because in August it passed a sub decree allowing foreigners to use property they own via a leasehold as collateral with the banks.
Some of Cambodia's neighbors already permit some type of foreign property ownership. Thailand, Singapore and Malaysia all allow foreign investment in "immovable property" with various restrictions. Immovable property includes not only land but buildings and leases.
In Thailand, the rules are that at least 51 percent of high end apartment block developments must be Thai-owned. In Singapore, foreign nationals can own property above the seventh floor.
"It would be a natural progression for Cambodia to introduce something similar," said Rendall. "It will bring a massive injection of investment into the economy. There will be a huge reaction."
Other options could be prohibiting foreign ownership of ground floor units, but allowing sale of above ground apartments. Or the government might change the title deeds so that anything defined as a "building" but not as "land" could be bought. A change in the law would clearly benefit developers such as the South Korean developers of the Camko City project, which includes many high end apartments.
Camko City officials could not be reached for comment. According to the company's marketing information, the first planned development includes 18 houses and 100 townhouses, but many more large blocks of apartments.
At the moment, property developers get around the land buying restriction by selling leaseholds to foreign investors, said Chandler at Brocon,
He said foreign buyers obtain a 99-year lease with an option to renew. The leases all include a clause saying if the land law changes, the leaseholds will be converted to "free hold." Owners would have to pay certain taxes and transfer fees to convert. He said Brocon has sold more than 20 properties under the lease agreement.
"A change of law allowing foreigners to buy would mean all leases revert to freehold and that would give us an even easier product to sell," said Chandler.
Brocon's target market is sophisticated foreign investors who already have property portfolios in the region. "The current legal framework is not an impediment to us. We are not selling to mum and dad investors."
"Capital growth on land over the last two years has been ridiculous-something that sold for $500 two years ago is now $2,000 plus," said Chandler.
The government is on the verge of changing the property ownership laws so that foreigners will be able to buy real estate in the country and own it outright.
Although current law prohibits foreigners from actually holding title to land in Cambodia, the National Assembly is considering an amendment to the law that could be approved soon, said Nuth Narang, Secretary of State at the Ministry of Land Management, Urban Planning and Construction.
"Local developers have a massive interest in seeing the law change. Cambodia is open for business now. There is huge demand, foreigners would buy property," said Matthew Rendall, a lawyer with the investment advisors Sciaroni and Associates.
Although it was not clear what restrictions Cambodia might put on foreign property investment, Rendall said there is no downside to changing the law. Cambodia has "nothing to lose," he said.
Developers contacted by the Post said a change in the law would change the marketing environment for developers in Cambodia.
Marketing director Nhem Sothea at Grand Phnom Penh International City said changing the law would make it "much easier to sell property here."
"There is a large Korean market -they want to come here and retire and we could access that market better with a change to the law."
Backed by Indonesia's Cinputra, through a local partner RCAF Gen. Ke Kim Yan, the International City is developing 260 hectares 20 minutes northwest of the city center into a gated community.
Nick Chandler, sales and marketing director for Brocon, which buys colonial buildings in Cambodia and rehabilitates the apartments for sale to foreign investors, said a change in the law would create huge demand.
"There is a real buzz regarding Cambodia," he said. "They have had three years of double digit growth-9 percent this year. A lot of people see that and those people see property as the best and most stable way to get into this market."
Narang said the ministry is discussing whether changing the law "will be beneficial to the economy." "We need to assess how best to go about this," said Narang. He added that the ministry is seen as favoring the amendment because in August it passed a sub decree allowing foreigners to use property they own via a leasehold as collateral with the banks.
Some of Cambodia's neighbors already permit some type of foreign property ownership. Thailand, Singapore and Malaysia all allow foreign investment in "immovable property" with various restrictions. Immovable property includes not only land but buildings and leases.
In Thailand, the rules are that at least 51 percent of high end apartment block developments must be Thai-owned. In Singapore, foreign nationals can own property above the seventh floor.
"It would be a natural progression for Cambodia to introduce something similar," said Rendall. "It will bring a massive injection of investment into the economy. There will be a huge reaction."
Other options could be prohibiting foreign ownership of ground floor units, but allowing sale of above ground apartments. Or the government might change the title deeds so that anything defined as a "building" but not as "land" could be bought. A change in the law would clearly benefit developers such as the South Korean developers of the Camko City project, which includes many high end apartments.
Camko City officials could not be reached for comment. According to the company's marketing information, the first planned development includes 18 houses and 100 townhouses, but many more large blocks of apartments.
At the moment, property developers get around the land buying restriction by selling leaseholds to foreign investors, said Chandler at Brocon,
He said foreign buyers obtain a 99-year lease with an option to renew. The leases all include a clause saying if the land law changes, the leaseholds will be converted to "free hold." Owners would have to pay certain taxes and transfer fees to convert. He said Brocon has sold more than 20 properties under the lease agreement.
"A change of law allowing foreigners to buy would mean all leases revert to freehold and that would give us an even easier product to sell," said Chandler.
Brocon's target market is sophisticated foreign investors who already have property portfolios in the region. "The current legal framework is not an impediment to us. We are not selling to mum and dad investors."
"Capital growth on land over the last two years has been ridiculous-something that sold for $500 two years ago is now $2,000 plus," said Chandler.
14 comments:
foreign investors will buy the whole country of cambodia. cambodia has nothing to lose only land. government officials have lot of land to sell to foreingers after robbing from poor khmer people. change law to rob land from the poors and change laws to sell land to rich foreigners.
Oh great! I don't mind buying a piece of land and built a very big community with all the amenities surrounded by gates and bodyguards and separated from those dirt poor hungry Cambodian people and let those dirt poor Cambodian people stay and die in their own slum or ghetto and we the rich foreigners in our gated community can enjoy the champagne and the good food and the nice weather on the tennis court which will immune from all the violent in Cambodia.
We rich foreigners have been waiting for this opportunity for a long time! I feel like living in embassy palace already when thinking about it! Ahahhahahahhaha
Oh well! Thank to Mr. Hun Sen leadership and Cambodia has become dirt cheap and dirt poor. We want Mr. Hun Sen to stay in power forever! Ahahhahhahhahah
The Russia made a colossal blunder when they sold a portion of their land to the U.S. for $7.2 million, now it is know as "Alaska."
I hope we don't make the same mistake like the Russian did.
This are very great news!!!
Now Vietnamese and Thai people can buy Cambodian land and develop the country.
All the 3 Million Vietnamese people can buy now the Cambodia land in their own name.
Maybe the Government even consider later to change the name of the land from Cambodia to CamboViet?
This will be a Multi Culture Community when Vietnamese, Thai and Cambodian people live peacefully together in Cambodia.
This is the Future of Cambodia.
When the law passed, all provinces in Cambodia will be on sales. Vietname will buy all the provinces on the East side of the Mekong river, while the thai will be buying the ones on the West. Khmer will become slave on their ownland. No more Cambodia. Great vision and policies from Flying Horse PhD. Hun Sen leadership
fuck, let go ahead and sell the whole country to our neighbors, and get this money buy or drinks, sex and gambling
STUPID FUCK HEAD, SELLING THE LAND OF OUR OWN BLOOD, THE GREAT LAND OF OUR ANCESTOR , THEY FOUGHT THE WAR TO PROTECT THE MOTHER LAND. THEY SACRIFICIED THEIR LIVE FOR THIS LAND. YOU DONT WANT TO RE BORN TO BE A DOG. PLEASE CONSIDER NOTIHNG AT ALL. FUCK HEAD
Eventually Khmer will have no land to live on and be slave to all the foreigners. Only the corrupt government officials and business leaders will prosper. This is a disastrous policy and they will drive the price up and 90% of Khmer cannot afford it. Another civil war is possible and Khmer will hurt each other again and will benefits only the Viet and the Thai. How much more stupider can this ah Hun Sen and his governemnt get. They just don't get and this cannot allow to happen.
CAMBODIA FOR SALE
CAMBODIA FOR SALE
CAMBODIA FOR SALE
CAMBODGE À VENDRE
CAMBODGE À VENDRE
CAMBODGE À VENDRE
A DISASTROUS RESULT OF A PERFECT MARRIAGE,CPP AND FUNCINPEC. VOTE THEM OUT COMPLETELY FOR THE SAKE OF YOUR COUNTRY AND YOUR CHILDREN/GRAND-CHILDREN'S FUTURE. OTHERWISE, IT WOULD BE ALL OVER IN A MATTER OF FEW SHORT YEARS IF THIS LAW EVER PASSED.
All the Youn will come to buy Cabodia, we poor Khmer need to built boat to live in the sea!
Is the king come with us or want become communist Youn?
12:53 AM
We have already been slaves to foreigners, because we're too stupid.
It is not a bad idea to sell our land to foreigners.
WE are no slaves. We are Free country . Free Spirit. Free Soul. Freedom. WE are one true Cambodia. Prosperity and pride.
What foreign investors have to expect in Cambodia are , to pay tree times more to send a container out like in the neighbouring countries . Wait up to 3 weeks to get all the papers and get the container on a ship. Pay up to US $10 000.00 on bribes to get a container out from customs .
To bee stopped by police in average 5 times a day and pay up to US $ 200.00 to get his license and the keys back for his car .
To be stopped by police with out reason and have to wait up to 3 hours before released .
To obtain a CDC license and pay up to US $ 200 000.00 on bribes .
Even they give the land for free to investors , Cambodia are not the place to put your money , you knowledge and you technology .
A.Q. Germany
Very easy . You don't like foreigner own some land in Cambodia . Don't sell it , keep it .
But don't complain about unemployment and low living standard and don't complain about the low price the Cambodian people pay because they have no competition.
Regards , A.P.Goebel Sydney
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