Property News Roundup 6th August 2024

We’re delighted to share the weekly news highlights below.

1. Hong Kong leader to push mainland Chinese market access on visit to Laos, Cambodia, Vietnam

Hong Kong’s Chief Executive, John Lee Ka-chiu, is on a nearly week-long trip to Laos, Cambodia, and Vietnam to promote Hong Kong’s role as a connector to the mainland Chinese market. During this trip, he aims to strengthen ties with these Southeast Asian nations and seek support for Hong Kong’s bid to join the Regional Comprehensive Economic Partnership (RCEP), the world’s largest free trade agreement. Lee’s delegation includes over 30 representatives from various sectors, focusing on people-to-people exchanges in tourism, education, talent, and youth. In Laos, Lee will meet top officials and visit significant projects like the Saysettha Development Zone and the China-Laos Railway terminus. The trip also includes signing several memorandums of understanding covering cooperation in aviation, logistics, and industrial developments. This visit marks Lee’s third trip to the ASEAN bloc since taking office, following previous visits to Singapore, Indonesia, Malaysia, and Thailand. The delegation’s efforts aim to showcase Hong Kong’s economic opportunities and professional services, fostering stronger regional connections and support for Hong Kong’s economic initiatives.

July 28th 2024 | SCMP | Link:t.ly/zHCTr

2. Cambodian industrial park seeks to draw tenants from Thailand, Vietnam

The Phnom Penh Special Economic Zone (PPSEZ) in Cambodia is aiming to attract more companies from Thailand and Vietnam as global supply chains shift. Traditionally a base for Japanese and Chinese manufacturers, the PPSEZ is diversifying its investor base. The zone, which spans 3.57 square kilometers and houses over 90 tenants from 15 countries, is one of Cambodia’s leading industrial parks. China’s Marvel Garment, the largest tenant, employs about 17,000 workers. The PPSEZ’s efforts to draw new tenants come amid broader regional trends, including the movement of supply chains away from China. This diversification is seen as an opportunity for Cambodia to strengthen its industrial sector and reduce reliance on any single country.

July 28th 2024 | Asian Nikkei | Link:t.ly/xgAEr

3. Credit Growth Lowest in 20 Years, National Bank Says

In the first half of 2024, Cambodia’s banking sector experienced its lowest credit growth in 20 years, at just 2.6%, despite the economy growing by 6.3%. National Bank Governor Chea Serey attributed this to cautious loan approvals due to global economic uncertainties and slow recovery in some sectors. The non-performing loan ratio stood at 6.8% for banks and 8.3% for micro-finances. Economic growth was driven by significant increases in the garment, tourism, and agriculture sectors, while construction and real estate lagged. Inflation remained low at 0.4%, and the exchange rate was stable at 4,075 riel per dollar. Cambodia’s international reserves reached $20 billion, sufficient to cover seven months of imports, reflecting strong economic stability. The banking system’s active assets grew by 6.1%, with consumer loans and deposits also increasing. The country has a diverse financial sector, including commercial banks, microfinance institutions, and payment service providers. The National Bank’s cautious monetary policies have helped maintain investor confidence and economic stability amid global uncertainties.

July 25th 2024 | Cambodianess | Link:t.ly/lhqkv

4. Business Owners Share Their Stories of Closure

Despite Cambodia’s economic recovery, many businesses are struggling, leading to closures. A 44-year-old entrepreneur who ran a successful bakery across Phnom Penh had to shut down his stores due to low footfall and unfulfilled promises by mall operators to attract customers. Similarly, Vann Bora, a young entrepreneur, had to close his food delivery service and cafe due to declining orders and customer visits. In Siem Reap, vendors face challenges with soaring rents. Veng Chomreaun, who ran a popular pizza house for 24 years, had to close his restaurant due to economic challenges and disruptive construction work. Other businesses, such as Darany BBQ and Khema Angkor, also had to shut down due to various reasons including increased taxes and dwindling customers. Special education schools and businesses adapting to new technologies like AI are also facing challenges. Economists observe that while some businesses are closing due to declining orders, others are opening. They suggest that more solutions are needed, including support from the government and foreign direct investment, to prevent rising unemployment rates and negative societal impact.

June 24th 2024 | KiriPost | Link:t.ly/doEcU

5. Financing for real estate up 25 percent, despite rising NPLs

In the first half of 2024, Cambodia’s real estate and construction sectors experienced a significant surge in loan disbursements. The real estate loans saw an increase of 25%, while construction loans rose by 15% compared to the same period in the previous year. This growth in lending, however, was accompanied by a rise in Non-Performing Loans (NPLs). Banks and microfinance institutions reported an NPL rate of 6. Despite the challenges posed by the rising NPLs, the robust growth in lending underscores the resilience and potential of Cambodia’s real estate and construction sectors. The data suggests a positive outlook for these sectors, albeit with the need for cautious optimism given the increasing NPL rates. The situation calls for effective risk management strategies to ensure the sustainability of growth in these sectors. The increase in lending is a testament to the confidence of financial institutions in the potential of Cambodia’s real estate and construction sectors, even in the face of rising NPLs. It remains to be seen how these sectors will navigate the challenges ahead and continue their growth trajectory.

July 3oth2024 | Khmer Times | Link:t.ly/16Etk

6. Chinese-invested Airport in Cambodia Handles 10,971 Flights, with over 1 mln Passengers

From November 2023 to June 2024, the Siem Reap Angkor International Airport (SAI), a Chinese-invested venture, has seen significant activity, handling 10,971 flights and serving approximately 1.02 million passengers. This bustling airport has facilitated the operations of 12 airlines, connecting 15 cities across eight countries. The infrastructure of SAI, which includes a 3,600-meter-long runway, makes it the largest airport in Cambodia and the primary access point to the Angkor Archaeological Park. The establishment and operation of this airport are a testament to the fruitful cooperation between Cambodia and China under the Belt and Road Initiative. It is anticipated that the airport will have a positive impact on various sectors in Cambodia, including tourism, economy, trade, and investment. Despite the challenges that come with managing such a large-scale operation, the airport’s success in handling a high volume of flights and passengers indicates a promising future. As the airport continues to grow and serve more passengers, it is expected to further contribute to Cambodia’s socio-economic development and strengthen its connections with the rest of the world.

July 27th 2024 | Cambodianess | Link:t.ly/cKrtZ

7. Royal Railway Boosts Freight Capacity with New Wagons from Malaysia

Cambodia has officially updated its national accounts base year from 2000 to 2014, aligning with international standards and improving the accuracy of economic data. This change was announced at a workshop attended by government officials and experts. Minister of Planning, Bin Trachhey, emphasized the importance of this update for reliable economic statistics and a clearer understanding of Cambodia’s economic landscape. The new base year utilizes the 2008 National Accounting Statistics System and the2008 Classification of Productive Activities, incorporating changes in the economy since 2000. This update is crucial for evidence-based decision-making and reflects Cambodia’s commitment to modernizing its national accounting system. The National Institute of Statistics plays a vital role in ensuring the quality and reliability of economic data, further enhancing Cambodia’s ability to monitor and manage its economic development effectively.

July 29th 2024 | EACNEWS ASIA | Link:t.ly/39HRe

8. India’s outbound tourist spending to reach $18.82 billion this year, with emergence of new destinations: FICCI-Nangia

Indian tourists are projected to spend $18.82 billion in 2024, marking a return to pre-pandemic travel levels and the emergence of new hotspots, according to a new report. The number of people departing the country last year was about 28.2 million, surpassing the nearly 27 million in 2019. In that year, Indians spent $28 billion on traveling abroad. The average outward foreign exchange remittances have increased to $1.42 billion per month in 2023-24, up from $400 million in 2018-19. However, the projection of spending by Indians traveling abroad has shrunk from a previous estimate of $42 billion. Despite this, spending by Indian travelers overseas is now expected to increase at a compounded annual growth rate of 11.4% to about $55 billion by 2034. India’s outbound departures are expected to almost triple to 50 million by FY30. Improved connectivity, with more direct and affordable flights, and the desire for international travel are driving this growth. Countries like Egypt, Azerbaijan, and Georgia, as well as Southeast Asian nations Indonesia and Malaysia, have become popular destinations due to relaxed visa norms. The number of Indians traveling abroad is expected to continue increasing, fueled by rising disposable incomes and an expanding middle class.”

July 31st 2024 | MSN | Link:t.ly/UGOIM

9. Cambodia Hotel Association: Recovery in Sight Despite 93% Decline in Chinese Tourists and Reduced Air Travel Last Year

The Cambodia Hotel Association (CHA) has been instrumental in the recovery of Cambodia’s tourism market post-COVID-19. Despite reaching 81% of pre-pandemic levels in 2023, the sector faces challenges, particularly with a 93% decline in Chinese tourists and reduced air travel. CHA’s efforts include lobbying for tax exemptions, financial aid, and promoting sustainable tourism practices. The association is optimistic about the future, focusing on increasing land arrivals and improving air travel to boost the tourism industry.

July 31st 2024 | Cambodia Investment Review | Link:t.ly/4As5u

10. Cambodia mobilizes $62M through govt bonds

The Cambodian government has raised approximately $62 million from local investors through the issuance of government bonds in the first half of this year. This amount represents over 50% of the targeted $108 million for 2024. The funds, raised through six auctions, will be allocated to crucial public investment projects, particularly in infrastructure, to promote economic growth. The Ministry of Economy and Finance began issuing government bonds in September 2022 to increase domestic revenue and reduce reliance on foreign borrowing. The bonds are auctioned through the National Bank of Cambodia Auction Platform (NBCP) and will soon be available on the Government Securities Auction Platform (GSAP) under the Cambodia Securities Exchange. Investors benefit from a 50% deduction on withholding tax on interest earned and a three-year tax exemption on capital gains from trading the bonds. The central bank is also preparing legal procedures to allow non-bank companies to participate in these transactions. This initiative reflects growing confidence in Cambodia’s economic trajectory and fiscal management.

August 2nd 2024 | Khmer Times | Link:t.ly/2KEhW