Prince Real Estate CEO Edward Lee spoke with CIR Leader Talks on the company’s long-term ambitions in Cambodia’s real estate market, current and future trends post-COVID, and his recent Personality of the Year award at the Cambodia Real Estate Awards 2023.
Prince Real Estate Group emerged as the Best Developer and Best Mixed-Use Developer at the 7th PropertyGuru Cambodia Property Awards 2022. Edward also expressed gratitude to other real estate players who have contributed to the progress of the Cambodian market.
“I am honored to have received the Personality of the Year award, but we should also thank real estate players more broadly for helping the Cambodian market continue to progress,” he said.
Edward added, “My team and I have been working hard to rebrand Prince for the future. We want the company to be known for generational quality, its commitment to the local economy, and international reputation to foreign investors. While I have only been in the position for a relatively short period of time, I believe the company is already positioning itself as a market leader in all these categories.”
Read more: Canopy Sands Development Takes Home Top Honors at Cambodia Real Estate Award 2023 with Three Prestigious Awards
The annual event is organized by Realestate.com.kh in collaboration with The Ministry of Land Management, Urban Planning and Construction, The Real Estate Business and Pawnshop Regulator of Cambodia, and the Cambodian Valuers and Estate Agents Association.
Cambodia’s unique market opportunities
Edward, who has experience in real estate markets in Vietnam, Malaysia, and the US, said that Cambodia’s market is unique and offers advantages such as a more open local market, favorable regulations for foreign buyers, and strong rental yields for investment real estate.
He explained, “Cambodian real estate market is quite a bit different than the real estate markets of Vietnam and Malaysia, mostly because the local market is open to more international buyers. Cambodia has a relatively small population of 16 million, but with the very easy and relaxed regulations for foreign buyers, the target market increases 10-fold.”
“Another big difference is that Cambodia has very good rental yields for investment real estate, as well as a US dollar economy, so investments can be better protected against foreign exchange losses,” he added.
According to market consultants CBRE Cambodia, the local real estate market is currently experiencing the most competitive and challenging conditions it has ever faced. Consequently, they urged all players in the industry to reevaluate and update their strategies to better align with the unique context of 2023.
This includes acknowledging that the trends and growth experienced over the past decade may not necessarily continue into the coming years, as the dynamics of the market have fundamentally changed with supply continuing to rise and demand remaining relatively lackluster, CBRE’s Q1, 2023 report highlighted.
Discussing the ongoing supply and demand issues for real estate in Cambodia, Edward mentioned that supply typically outpaces demand by about three years. He believes that demand will increase post-COVID, with several key projects from Prince Real Estate, such as Prince Happiness Plaza.
“We have had around 600 units already sold at Prince Happiness Plaza in the first quarter of the year with buyers from many different countries, so there is a positive uptake. However, I should say that we don’t believe the next few years will be a return to pre-COVID demand of 2019, where the market was booming and anything would sell due to both micro and macro conditions,” he said.
Edward continued, “That said, this market correction could actually be a silver lining for the market to allow for a more stable and gradual increase, which is actually a good thing for the market with demand getting stronger as businesses such as tourism return.”
Cambodia’s maturing retail sector
As for retail and shopping centers in Cambodia, Edward explained that the country is currently in an early stage of development, providing opportunities for early movers like Prince. He stated that their focus is not only on local retailers but also on attracting international brands and family-friendly attractions to improve the uniqueness of their malls.
The company also recently announced a major initiative, Prince International Plaza’s One-Year Rent-Free Leasing for Commercial Spaces, to support up-and-coming business owners in Cambodia. The plaza is offering one-year rent-free leasing for its available floor spaces, including kiosks and pushcarts.
This initiative is part of the plaza’s commitment to fostering a vibrant business community in Phnom Penh. Interested individuals and businesses can take advantage of this incredible opportunity to establish themselves in a prime location without worrying about rental costs for the first year.
Read more: Prince International Plaza Announces One-Year Rent-Free Leasing for Commercial Spaces
Edward shared, “While we are growing our local offerings we are also are sending our commercial team out to Malaysia, Japan, Singapore, and more to start talking to retail associations there, to do a trade mission and bring their businesses here. We aim to bring in more family-friendly attractions into our malls to improve the uniqueness of our offerings.”
Improving infrastructure & high-end hotels
Edward also spoke about improving infrastructure in Sihanoukville and the recent groundbreaking Bay of Lights New Township project, a $16 billion investment expected to be completed by 2028. The project, which aims to transform the area into a green coastal city, is anticipated to boost the local economy and contribute to the renaissance of Sihanoukville.
“I go every week to Sihanoukville to see the projects we have developing, and the city is starting to reactivate post-COVID. The government is also implementing an ‘operation unfinished buildings’ initiative, which is identifying buildings above five stories that need to be completed and working out the ownership, potentially allowing benefits to local or international developers that can take over the project,” he said.
On the topic of high-end hotels, Edward mentioned that there had been an undersupply of luxury hotels in Cambodia, especially in Siem Reap and Sihanoukville over the last 10 years, which led to many big-name brands looking to enter the market pre-COVID.
He believes that as flights resume and the demand for better quality accommodations rises, it is the right time for high-end hotels to enter the Cambodian market. Prince Real Estate has already developed a few high-end hotels, such as Prince Times Hotel in Sihanoukville and some villa resorts.
Read more: Prince Times Hotel assists to rejuvenate travel and investment in Sihanoukville
Edward noted, “Because of the current land values, investors need to see a certain return on value, and hence you need certain price points for those hotels. In addition, the push for higher-end tourism will need a higher-end product. This is the right time for high-end hotels to come into Cambodia, and this is also a good time to partner with brands.”
He also pointed out that the price per room night in five-star hotels in Cambodia is higher than in countries such as Thailand and Vietnam. It is essential we offer fair rates to attract tourism and create a healthy ecosystem that continues to support the growth of Cambodia’s entire economy.
Long-term optimism for the Cambodian market
Reflecting on the long-term vision, Edward is optimistic about the future of Cambodia’s real estate market, citing strong GDP growth forecasts of over 5% and controlled inflation.
He believes that the property sector will continue to be robust, driven by easy investment regulations and favorable government policies. However, he acknowledges that there will be challenges along the way, but with proper planning and policy implementation, these can be overcome.
Edward concluded, “Now, of course, there will be challenges, but this can be overcome in line with good government policy over the next 5 to 10 years before another market correction cycle as we are experiencing now.”
“As long as the general business climate remains healthy, as long as new businesses continue to enter the local market and GDP continues to grow, I believe that even with a higher push to local currency, everything would still be okay,” he added.
As CEO of Prince Real Estate, Edward Lee remains committed to the company’s growth and success in Cambodia’s real estate market. With a focus on award-winning projects, innovative strategies, and long-term ambitions, Prince Real Estate is well-positioned to capitalize on the unique opportunities offered by Cambodia’s unique real estate sector.