Malaysian banks spur Cambodia's growth
Published on: Sunday, September 18, 2016
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SIEM REAP (Cambodia) Malaysian banks like Public Bank and Maybank are reaping good profits from their foray into Cambodia, including offering affordable housing loans that is strict in Malaysia at present. Cars are also cheaper in Cambodia.

Cambodian Public Bank, established in May 1992, is now the largest 100 per cent foreign-owned commercial bank by asset in Cambodia and has expanded its branch network to 30 throughout Cambodia.

"We will focus on providing affordable housing loans to the Cambodians to purchase and own properties.

To help them own their own house to improve their standard of living – that is one of our main objectives."

Phan Ying Tong, Regional Head of Indo-China Operations, said.

"We are very happy to be in Cambodia. We are deeply rooted in the community.

Our main customers are the Cambodian people and Cambodian business. They are very happy with our excellent customer services and have remained loyal to our Bank.

"Cambodian Public Bank also serves the banking needs of the large growing international community of Malaysian investors and from other Asian countries which clearly reinforces the fact that Cambodia is certainly a great country to do business with its investor-friendly policies in place," said Phan.

For example, Sabah's property developer Nexus Karambunai Resort sold off lands to local developers to build Grand Merdaka, Taman Rimba, etc, next to its Bandar Sierra properties, to invest in Cambodia, one of the faster growing markets for property.

Land prices in Siem Reap are continuing to climb due the province's robust tourism industry, realtors say.

It is hoped the growing tourism sector in Sabah will also propel the local property market upwards soon despite negative publicity on its East Coast.

Siem Reap, the Cambodia provincial capital, saw prices rise five to 10 per cent in residential areas last year and 10 to 15 per cent in commercial areas, said Po Eavkong, Managing Director of Asia Real Estate Cambodia Co. Ltd.

He said Asean integration would help boost the market, but added that it is already an open market.

The property market in Siem Reap is the most active in Cambodia, after greater Phnom Penh, the capital.

"Siem Reap land prices rose last year because of the increasing number of tourists. As a result, hotels, entertainment venues, shops and services saw rising demand. The tourism industry is invigorating the property market," Eavkong said.

The country, like Vietnam and Myanmar, is keenly watched to see when would it likely overtake Malaysia.

Cambodian Public Bank has won a record number of repeated recognition awards, among them "The Bank of the Year in Cambodia" (for the 9th time) and "Best Domestic Retail Bank of the Year in Cambodia" (for the 4th consecutive year).

"The made a brave decision to invest in Cambodia in 1992. At that time, Cambodia had just returned to peace after civil war. We recall the very good relationship with Cambodia at that time. Malaysia was the first country to offer Cambodians visa-free entry to show our friendship.

"The [then] Malaysian Prime Minister, Dr Mahathir Mohamad, invited businessmen to invest in Cambodia because he firmly believed in the policy of 'prosper thy neighbour' because if your neighbour prospers, then you are at peace as well.

We have come a long way from a very humble one branch. Through ups and downs, from our head office, we have 30 branches at the moment," Phan said.

Chrek Soknim, CEO of Century 21 Mekong, said he agreed the tourism industry was driving the property market in Siem Reap.

"Not only residential but also commercial areas saw remarkable development [last year], due to the flow of tourists into the town," he said.

"Demand for tourist venues like hotels, guesthouses, shops and restaurants is driving the property market in Siem Reap," he added.

Dith Channa, General Manager of VMC Real Estate Cambodia, is also optimistic about the property market in Siem Reap.

"In 2015, demand for land and property transactions increased, not only for hotels, guesthouses or restaurants but also for residential projects," Channa said.

"The Asean Economic Community will play an important role in boosting the property sector and business in the city due to the open market for investors," he added.

Last year, the province attracted more than 2.3 million foreign tourists, a slight increase from 2.2 million the year before, according to data from the Tourism Ministry.

There are 186 hotels in Siem Reap with a total of 12,053 rooms, as of the end of September, according to the provincial tourism department. Of these, 14 are five-star hotels and 25 are four-star hotels.

Meanwhile, an India-based company is exploring investment opportunities in Cambodia's real estate and hotel market and says it will invest US$1 billion over five years.

Vidip Jatia, a director of Supreme Holding and Hospitality (India) Limited, said the Cambodian economy is growing quickly and his company is here to explore investment opportunities in the kingdom.

The first phase of his company's five-year plan will involve a US$100 million investment in Cambodia's real estate market, he said.

"When it comes to real estate development, we are looking for local partners to come with their land ... and be associated with our US$100 million investment in 2016 in Cambodia," Jatia said.

"We are primarily looking at the hospitality and service industry and we have a collaboration with Higher International Group in India...we lobby and get them over here because we see a big opportunity in hospitality and tourism here," he added. "Cambodia has become one of the good destinations for tourists in Asean.

Supreme Holdings was incorporated in India in 1982 and became a public-listed company on the Mumbai Stock Exchange in 1994. Supreme Holding's business and ownership interests have largely been in five-star hotel development and operations, real estate development, trading, food and beverage and other ventures.

Brett Sciaroni, the Chairman of the International Business Chamber, said there is an historic link between Cambodia and India.

"We need to develop that further and I'm so happy to see our friend (Jatia) here, because precursors of things to come, we need diversification not only in terms of being economically diverse, but in term of investors – we haven't had enough Indian investment, but it is coming. You can see it," Sciaroni said.

Ho Vandy, an advisor to the Cambodia Chamber of Commerce and the President of World Express Tour and Travel, said the hotel sector depends on both international and local tourists for success in Phnom Penh or in the provinces tourists travel to.


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