Poipet: The latest real estate boomtown in Cambodia

Cambodia’s northwestern border town of Poipet is fast becoming a rival to Sihanoukvillein terms of real estate development.

Poipet, which borders Thailand and hosts an important border crossing between the two neighboring countries, is in the middle of a building boom.

Casinos, hotels, commercial buildings, and residential developments are going up in different parts of the town, fueled by massive foreign investments and an economic boom. Property values have gone up in many parts of Poipet as a result.

A part of Banteay Meanchey Province and occupying 2,620,000 square meters, Poipet is divided into three sangkats, namely: Poipet, Phsar Kandal and Nimeth. The town is home to more than 140,000 residents, both Cambodians and foreigners.

Hor Kunthea (Roy), CEO/Chief Executive Officer of Sokha Residences Group, said he was not surprised by the development, noting that the town’s property sector has shown great potential for rapid growth in the last six months.

He identified Sangkat Poipet as the area with the best potential. “The other two sangkats also offer good investment opportunities and property values there are also rising,” Mr Roy stressed.

According to him, many small and large scale developments have entered or are eyeing to enter into the Poipet property market. “Many investors from the outside are eyeing Poipet as a great investment destination,” he said, noting that this has contributed to the continuing increase of property values and prices.

In Poipet, according to Vtrust Appraisal’s 2017 Housing market and Outlook Report, 16 projects were completed last year, releasing 1,694 units into the market. Also, 909 units reached the market in the first half of 2018.

Poipet Governor San Sean Ho said there is no better time to develop real estate in the town. We, in the Government, encourages all investors to put their money into various real estate like hotels, guesthouses, residential houses, restaurants, and other facilities for tourists.

In Poipet, according to him, there are many existing, ongoing, and projects that are in the pipeline or drawing board. The town is currently hosting nearly 30 casinos, 10 boreys (gated residential community) projects and a number of factories in the Special Economic Zone that produce electronic, clothing, and other products. There are also at least 50 companies subdividing residential plots for resale.

Poipet’s first condominium project is now underway. Sokha Residences Group, which will occupy almost four hectares of land, is a combination of condo and boreys. Sokha Residences will have a 21-story building of 543 units with Super Store, Commercial and Office Space, Sports Club, Swimming Pool, Sky Bar, Penthouses, and 287 borey units.

Condo units are priced from $27,864 to $1,270,000, while borey units have the selling price of between $30,000 and $50,000 per unit. Sokha Residence is located in the Kilo Lekh Boun, Sangkat Phsar Kandal, Poipet.

The Government is also eyeing to develop Poipet’s tourism potential. Mr San said they are planning to develop 500 hectares of land into a premier tourism destination complete with a golf course, artificial river, giant garden, and a floating market. He said that once the project will be built, they are expecting thousands more of tourists will visit Poipet.

The above factors, together with the plan of the Cambodian Government to open more border crossings to Thailand, Chinese-funded road along the Thailand-Cambodia border, and the re-opening of the rail link between Poipet and Phnom Penh bode well for further development of the town into an important commercial and industrial hub.

“In our Economic Development Plan, we mainly focus on real estate and infrastructure development,” Mr San stressed.

He said one of their priorities is to build excellent concrete roads connecting different parts of Poipet.

Better roads are contributing to the increase of real estate prices in and around the town. Mr Roy noted that land along National Road (NR) 5 and adjacent to the Poipet roundabout currently fetches between $800 and $1,000 per sqm.

In the areas near the border where the casinos are located, land the previously sells between $300 and $500 are now priced from $1,300 to $1,500 per sqm.

The influx of Chinese is also another major factor that drove up property values in Poipet. The Chinese were attracted by the town’s investment potential and the availability of affordable land. There are currently more than 10,000 Chinese investors and workers in Poipet and it is expected to have more than 20,000 in 2019.

According to Mr San, most of the big hotels in Poipet are being rented by the Chinese. Both Mr San and Mr Roy agreed that the Chinese played a big part in the growth of the real estate industry, and also of property values, in Poipet.

Mr Roy said the presence of the Chinese created more demand and drastically increased rents. According to him, a flathouse on some main road that could be rented for as low as between $150 to $200 a month are now available for rent between $600 and $800 per month. A flat along the concrete road, which previously can be rented for less than $150 a month, is now available for rent between $350 and $400.

“Poipet’s property sector is growing similar to the one in Sihanoukville,” Mr Roy concludes.