A drop in the number of tourists and lack of diversification in the real estate sector has led land values and developments in Siem Reap to falter since the beginning of this year, a trend which analysts predict will continue throughout the rest of 2016.
Po Eavkong, general manager of Asia Real Estate, said that Siem Reap’s potential is only cut from the tourism sector, while the value of land has become trapped with a lack of investment in large-scale developments needed for the famed temple town to become more than just a single-stop destination. Nevertheless, land prices will increase by an average of only 5 to 10 per cent this year, the same percentage points as in 2015. With investments only coming in the form of boutique hotels, restaurants or the occasional minimal investment in recreational services, large hotels or residential developments like boreys have been sidelined, he said.
“Year after year, activity in Siem Reap seems not to change at all even if there are more tourists arriving, but the increase in tourist arrival is slower than when compared to previous years,” he said. However, he did welcome the opening of Brown Café slated for later this year, and the recent opening of the restaurant Malis as positive “new features”.
As for prime residential land prices around the crowded hub of Pub Street, Po Eavkong said a landed property could fetch between $300,000 to $400,000, or equal to $4,000 to $5,000 per square metre. Meanwhile, along Sivutha Boulevard prices could range from around $2,000 to $2,500 per square metre, with land further afield along National Road 6 falling anywhere from $300 to $150 per square metre.
Khom Moniroth, head of real estate consultancy Daily Realty Group, echoed that the land condition in Siem Reap has stagnated due to a lack of large investment because Siem Reap provides no opportunities outside of tourism. Nevertheless, when surveying the availability of land plots or residential units for sale, he said there is abundance, but “they just don’t sell”.
“Besides hotels and restaurants, there is nothing catchy,” he said.
In regards to the almost non-existent investments in other sectors due to the dependence on the tourism, Ang Kim Eang, head of the Cambodian Tourist Agent Association, said that the number of tourists visiting Siem Reap does seem to be quieting compared to the same time last year.
He said while there is still a steady growth of investment into the service industry of small hotels, guesthouses and restaurants, in order for residential units to take off, a new source of income needs to be produced for locals.
A more viable way to raise wages would be to have a shift of investment towards manufacturing local handicrafts or unique Cambodian products, instead of relying on imports of souvenirs from other countries, Eang said.
Additionally, branching out in existing land and housing developments would also be of help to Siem Reap’s faltering real estate revenue. Oknha Sieng Nam, an influential businessman and CPP-affiliated representative from the province who began a 52-hectare satellite city development known as Borey Sieng Nam in 2006 – which in 2009 was pegged as the future administrative capital of Siem Reap by real estate experts – said that while the majority of what he has already built has sold, he does not plan on pursuing any additional residential units within the borey. Instead, he said, he will focus on building rental homes for low-income workers, priced according to their annual wage.
“Constructing homes for sale is like investing all of your money, but if you rent, instead, you can have a regular revenue stream,” he said.