In Cambodia there are approximately 150 real estate agencies that are registered, with their agents working throughout the country concentrating solely on rentals, sales and purchases of “general property” such as condominiums, villas, apartments, borey and plots of land.
The property market continues to boom in the kingdom, however with new agencies and agents becoming established frequently, it’s only a matter of time before the market is completely saturated with real estate agents – working on the sales of the same properties and developments.
Because of this, a few agents have set their sights elsewhere and decided to work on renting and selling businesses – a niche in Cambodia’s real estate market.
South East Asia Property Services (SEAPS) is among the few agencies now working on business property. The company works on renting and selling all types of businesses and related properties such as bars, restaurants, boutique hotels and large hotels in Sihanoukville and Phnom Penh.
Cris Knowles, the Manager of SEAPS, said: “Cambodia is definitely an untapped market in the realm of business property, with great opportunities for motivated and knowledgeable buyers to turn around a fledgling business and create a strong presence in the area.”
Mr Knowles noted that enquiry and demand has jumped considerably over the past two years. They have found there is a wide range of buyers – both foreigners and Cambodian nationals.
Taking Sihanoukville and the surrounding areas of Koh Rong and Koh Rong Solem as an example, there is a much larger demand from western buyers and a gap in the market between the number of expat buyers who are looking to buy businesses and the agencies qualified to handle their enquiries.
Mr Knowles believes that dealing with businesses requires greater confidence, specific knowledge and necessary understanding of a business to sell it.
“After 17 years in the industry, I understand what my clients want and really take the time to listen to their needs and answer all the questions they may have.
“I need to make the buyers feel confident in the new business purchase and walk them through all the necessary steps involved.”
When it comes to purchasing a business and its assets, Mr Knowles said it depends on the scale of the business, but mainly it is based on the current profitability and opportunity for growth. Prices also vary a lot due to the type of business, with a typical bar starting at about $5,000 up to hotels that can be priced at the $300,000 mark and upwards.
Yi Fung Realestate is another agency also working on business property – but in a more concentrated way.
Stephen Suen, the Managing Director of Yi Fung Real Estate, said: “We focus mainly on boutique hotels and hotels that are mainly located in Phnom Penh. But we have also extended to smaller businesses in Sihanoukville and Kampot where we can now see more demand.”
Mr Suen has found the demand for hotel and accommodation businesses to be mainly from Asian countries such as Malaysia, Taiwan and China.
“Investors see plenty of opportunities currently in Phnom Penh as the market is growing rapidly, especially the tourism industry,” he said.
Mr Suen believes the demand of acquiring hotel businesses has brought different investor groups ranging from private to cooperate – or even chain franchises, with a vast range of budgets.
He said that real estate agents faced difficulties in “connecting the dots”.
“That’s why many other agencies don’t like this business area,” he said. “It requires more preparation, cooperation and patience as the bigger the deal, the harder it is to settle.”
Sharing Mr Suen’s view is Sorn Seap, the CEO of Key Real Estate.
“There are difficulties in dealing with both buyers and sellers that arise close to the sale,” he said. “This is because buyers need to take time to make sure that they will buy the right business.”
Mr Sorn believes buying a business property is different from buying a house.
“This is due to the fact that for buying homes investment return arises in the coming years, but buying a business is to get cash flow income monthly, immediately after purchase,” he said. “Therefore, some agents feel more comfortable working on general business property.”
All agencies spoken to who engage in the sale of business properties agree it is a longer process compared with general, more residential sales, but the results are satisfactory compensation and it can be a very rewarding process.
The market for these types of sales may still be considered small at the moment in Phnom Penh, but the demand is constantly growing, and now is a great opportunity for agents and agencies to expand their services and skills set alongside general property sales.
Want to invest in business properties? Go to Realestate.com.kh.
Ky Kosal is a Content Writer @Realestate.com.kh