Thursday, August 21, 2008

Cambodian gov't mulls foreign ownership of buildings, offices

Phnom PENH, Aug. 21 (Xinhua) -- The Cambodian government is mulling to allow foreigners to own condominiums and office buildings in order to prevent a possible downturn in property values and boost long-term investment, national media said Thursday.

At present in Cambodia, foreigners are prohibited from owning land or fixed assets such as buildings, apartments or office space.

Any government move to allow foreigners to own condominiums or office buildings would need to begin with Ministry of Land Management, a move that the ministry is indeed considering, English-Khmer language newspaper the Cambodia Daily quoted a ministry official as saying on condition of anonymity.

"I think the government will de-restrict the property market. Once things start getting more competitive, once things start to slow down, people start to look at other places and the competition starts to get more competitive, they will need to start doing more things to attract more foreigners," said Liam Bailey, head of international research for London-based realtor David Stanley Redfern (DSR), which has real estate business in Phnom Penh.

The real estate business in Phnom Penh and other major Cambodian cities have been booming in the past two or three years, but the market leveled off shortly before the general election in July this year due to the investors' political calculation.

During this period, the price has stayed stable but the demand decreased, which propelled the government, property consultants and retailers to think of the next step to heat up the market.

Koh Rong, an island off Sihanoukville, Cambodia, will be developed into a multi-billion pound tourist hotspot, by the Royal Group.

The move comes as property developers plan to invest billions of pounds to transform Cambodia’s coastline into one of Asia’s leading holiday destinations.

“We are talking about an island that is the same size as Hong Kong island, where we want to add things such as an airport, so ultimately we are certainly looking at several billions,” Mark Hanna, chief financial officer of Royal Group said.

After decades of war and genocide overseen by the Khmer Rouge regime, Cambodia is playing catch-up to other south-east Asian tourism hotspots in countries such as Thailand and Malaysia.

In the 15 years since Cambodia’s return to multiparty democracy, the country has made an impressive economic recovery and tourism has grown almost tenfold. Over 2m people visited Cambodia last year, but of those only 122,000 visited the country’s beaches.

Vantha Seng, chief financial officer of Seng Enterprise, said: “Thailand has shown how you can develop beautiful beaches but we also want to avoid some of the mistakes there and certainly want to remain upmarket.”

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