If you’re looking to increase your portfolio and want to take an active stance in investing, then you should invest in commercial properties. These are real estate properties that generate income, which allows you to increase your ROI and profit more than just buying it and waiting for the value to increase.
Cambodia is home to a growing economy that has taken a stable stance despite the slight downturn caused by the pandemic. More than that, the economy is currently on the fast track to growing more with how the tourism industry alone is predicted to increase the country’s GDP to 6.9% until 2024. In line with this, if you want to start investing in commercial properties, continue reading know how.
Types of Commercial Properties
One of the good things about buying real estate commercial properties in Cambodia is that there are different properties you can invest in. Know about them below:
In cities like Phnom Penh where it’s a hot zone for commerce, tourists, and locals, parking spaces are a good idea to buy. After all, there is a significant number of residents that have their own car so they can go anywhere they need to. Additionally, with a limited number of parking spaces, investing in one assures you a good profit in the long run.
Office buildings and spaces are always in demand, especially with the number of growing businesses in Cambodia set up by both locals and foreigners. Investing in one, especially in high traffic areas for commerce like Phnom Penh, Siem Reap, and Sihanoukville, allows you to get more than just the ROI when you lease it.
Resorts and Hotels
At the top of various reasons why tourists flock to Cambodia is because of the numerous tourist destinations. Due to this, hundreds of resorts and hotels have been developed in different areas of the country to cater to the growing demand, which only increases exponentially every year. This means if you invest in a resort or hotel, it would highly benefit you.
Warehouse & Industrial Real Estate
One part of ensuring businesses continue to thrive is by having a warehouse or industrial real estate that will support production, processes, and more. This means investing in it will be beneficial especially since there are a limited number of warehouses in supply in Cambodia. Currently, most of these are located in various districts in Phnom Penh.
One of the thriving sectors in Cambodia is retail, especially since it’s predicted to grow in the years to come. Currently with a net leasable area of 338,505 square metres alone in just the beginning of 2021, the estimated growth for retail properties is at 1 million square metres by 2021.
Is it possible to invest as a foreign investor?
For locals, investing in these properties simply means finding the right real estate and buying it but for foreigners, it is a bit more tedious since laws in Cambodia indicate foreigners can’t own land. However, it’s possible if you do either of the following:
One way to invest in commercial properties in Cambodia is if you set up your own local land-holding company. While you can only own 49% of the company and the rest should be owned by local investors, this is still one of the ways that provides the least risk to you as a foreign investor. This is because you can set up legal measures that protect your shares and investment. These measures are the following:
- Different shares → Create two different shares for local and foreign investors. With this, you can add a stipulation in the local shares that decisions for the company need two-thirds of the majority, less right to transfer shares, and more.
- Minority control document → When you set up a minority control document, like blank shareholder transfer forms or even a permanent majority on the company’s board, it protects your investment. Just take note that the minority control document is a series of private agreements between shareholders and can include different powers of attorney.
- Land security → The land security allows the foreign investor to ensure that the land can’t be transferred without their approval when they register a mortgage on it.
Another way to become a commercial property investor is to buy different units of a real estate. According to property laws in Cambodia, specifically for strata titles, foreigners can own up to 70% of the units available there. This means, if you invest in a commercial property like a condominium, you can buy numerous units there and start gaining profit from it by leasing it.
Becoming a Cambodian citizen
Another way is becoming a Cambodian citizen first through applications in order to buy the properties you want to invest in. You can do this by checking the requirements indicated on how to get citizenship.