What would you say if I told you about a country that has posted over 7% growth in Gross Domestic Product (GDP) every year for the past six years? What would you say if I told you this country did that while suffering only 3-4% inflation? What would you say if this country enjoyed a diverse economy that includes industries like garment manufacturing, agriculture, tourism, construction, natural resources and even gaming? How about if I mention they have a young workforce and use the US Dollar as their primary currency?
Would you guess which country it was? Here’s some more hints; they’ve been ruled by the same political party since 1979 with the same Prime Minister since 1985 and it’s in Southeast Asia. If you were an investor, wouldn’t you want to know where that is? Well, there’s only one country that can boast about all these things and it’s the Kingdom of Cambodia.
Yes, Thailand’s humble little neighbor has quietly built itself into a serious and viable destination for tourism and foreign investment. In 2015 nearly 5 million international tourists arrived in Cambodia to enjoy the temples, the beaches, the casinos and the hospitality of the gentle people. The average stay for these lucky visitors was seven days giving the hotels a 70% total occupancy rate for the year. Over 3 Billion USD was generated in 2015 alone.
While the famous city of Angkor in Siem Reap has been the star attraction, thousands found their way to the pristine beaches and coke-bottle green waters on Cambodia’s southwestern shoreline. The laid back resort town of Sihanoukville is cradled between Ream National Park and the Gulf of Thailand. The once sleepy beach town has made a resurgence in current years to become what The New York Times called, “The next Phuket”.
While that kind of development seems very far in the distance, with its long sandy beaches and peaceful clear waters, Sihanoukville certainly has the makings of a serious beach resort.
The vast majority of visitors come from other parts of Asia with Vietnam, China and Japan being the top three. Americans top the list of non-Asian visitors with a fair number from Europe. The Asians come for the casinos, the Americans and Europeans mostly for the beaches.
Sihanoukville boasts a handful of cozy beaches, each with its own personality. Fromsleepy Independence Beach, to perfectly manicured Sokha Beach to picturesque Serendipity Beach, Sihanoukville has a stretch of sand for everyone’s taste.
Late last year, the New Nordic discovery team took a trip to Cambodia and fell in love with what they saw in Sihanoukville’s Ochheuteal Beach. Three kilometers of sugary white sand crusted with funky beach bars and inhabited by lazy sun-worshippers. This is Sihanoukville’s most well-know party beach with many visitors returning year after year.
In true New Nordic fashion, the team enjoyed all the charms of Ochheuteal Beach, left behind a fact-finding party and soon purchased land about 550 meters from the water on the third road. This will be the site of New Nordic’s Sihanoukville Resort perfectly located only a six minute walk from the beach.
According to Johan Rucker, New Nordic’s manager for the Cambodia project, the resort will be apartments with strata title similar to condos in Thailand. The building will be in the typical New Nordic style fashioned after the Marcus buildings seen on Pratumnak Hill in Pattaya. Low-rise stylish condos no more than 7 floors with a variety of room sizes. Also in keeping with New Nordic tradition, a certain amount of Cambodian influences will be incorporated in the design. Johan went on to say that the number and configuration of the rooms hasn’t been settled on yet. “Some customization may be available” he said. “So part of it may depend on the customers”. He estimates 75 rooms from Studio size an up.
Like all New Nordic projects, we should expect the Sihanoukville Resort will offer a swimming pool, restaurant, bar and various shops. The full-service design is a trademark of this group.
Another trademark of New Nordic is the guaranteed investment scheme. According to Johan, this resort will offer a program similar to Pattaya’s projects; a 10% annual return. Pricing for apartments will be similar to Pattaya.
Johan and the New Nordic team are currently in the process of getting the proper permits and licenses to begin construction. His prediction is that work could begin as early as next year. As with most New Nordic projects, completion of such a building usually takes less than two years.
An interesting feature of Sihanoukville is that even though it is famous as a tourist destination, it is not dependent on tourism. Thanks to the Cambodian Special Economic Zone, many international residents and investors have decided to call the little city by the sea home. It’s a real city” says Johan. “With a big port and a brewery and factories. Sihanoukville was here long before the tourists found it. It gives the city an interesting mix of locals, tourists and expatriates”.
It also appears that infrastructure is gearing up for even more expansion. The airport has increased traffic exponentially. In 2012, only 13,000 visitors arrived. In 2015 that number had swollen to 150,000. Arrivals are predicted to hit 500,000 by year 2020. Similarly, the already significant port is expanding for cargo, cruise ships and military use. Sihanoukville is now the busiest port in Cambodia.
In October last year, the Chinese government pledged 2 billion dollars for infrastructure projects including a new road connecting Phnom Penh and Sihanoukville replacing the treacherous path currently used significantly slashing drive times. Construction starts this year. And after 14 years dormant, the train linking the capital city with the beach is running again. The scenic five hour journey from Phnom Penh to Sihanoukville can be had for a fraction of the cost of a bus ticket. For “follow the infrastructure” investors, these are all green flags.
So it seems that slowly and surely Cambodia has entered the picture for expatriates, tourists and property investors in Southeast Asia. In typical Khmer style, they’ve risen in the ranks of “places you might want to invest” quietly and with style. Leave it to our friends at the New Nordic Group to get in early on what could be a long profitable run.