Once, the Riverside area was where all the action was at. The royal family resided down near the Chaktomuk and held ceremonies on its manicured lawns. Naturally, it became a magnet for the first wave of expatriates who moved to Phnom Penh when the city was still in chaos – what remained of the Pearl of Asia, was concentrated around the vicinity of the Royal Palace.
Little wonder then, that tucked within assuming alleyways that are often still unrecognised by Google maps, are little gems from the colonial period that command sky-high prices that defy its dingy facade.
A one-bedroom unit with views of the old Post Office was listed for as high as $700 per month – an obvious indicator that whomever owned the units was targeting expatriates who could and would sacrifice some luxuries in exchange for a make-believe view that transports them to a by-gone era.
But these days, Cambodia is in the middle of rapid development. New cranes appear on the skyline every day. As accommodation options begin to diversify and foreign influences begin to affect tastes and preferences, more people seem to be abandoning their Riverside dwellings, as evidenced by the ever-increasing number of ‘For Sale/Lease’ signs along Street 19. Adjacent to the Royal University of Fine Arts, on leafy Street 178,
a similar view can be seen – and the sight doesn’t seem to change as one makes a turn towards the Old Market.
“Now that many areas of Phnom Penh have undergone rapid development, there are more options in different areas that arguably, no one would have even thought of looking at about five years ago,” said Bobby Peoples, the Cambodia Country Manager for HomeConnect.
According to Peoples, this ‘march’ towards the south is undoubtedly tied up to the economic development of the country – in particular, the financial backers of Cambodia’s rapidly growing economy. “For the longest time, the expatriate community here was dominated by Europeans,” he said.
“The number of Asian expatriates are on the rise, and along with their investments, they brought along their tastes and preferences of what an accommodation should be like.”
“The new wave of expatriates have a different set of demands – they want modern, secure accommodation at lower prices with better amenities,” continued Peoples. “This is why we’re seeing an increase of such developments, and these apartments and condominiums around the Riverside no longer fit the bill.”
Comparatively speaking, newer developments do have better value for money. For the same amount of money that one could expect to fork out for a one-bedroom unit around the National Museum, one can get a two, or even three-bedroom unit, complete with a gym, a communal rooftop garden, and/or or a swimming pool elsewhere.
“This is probably the main reason that interest on Riverside apartments are on the wane,” he said.
The appeal of the south side does not appeal only to newer-generation expats, but also to long-time expats such as restaurateur Edward Gibbons who has spent most of his time living around Riverside. After his Riverside apartment’s lease was up, he was among those who chose to move out of the area into the recently gentrified Russian Market area.
“[Russian Market] isn’t perfect – convenience stores are definitely harder to find in this area compared to where I lived in Riverside,” he said.
“But Riverside is getting seedier and as Phnom Penh attracts more tourists, the number of aggressive tuk-tuk drivers in the area have risen – and no one seems to be doing anything about it.”
“Furthermore, the area attracts more expatriates in my age group, which gives it a more creative and sociable vibe,” continued Gibbons.
“That said, it is quieter than down by the Riverside, where there is always something going on.”
If Phnom Penh is facing a south-bound sprawl, then what would become of these vacant apartments in the Riverside area? Many of these units have been refurbished to increase their appeal, so is the waning interest in these properties an early sign of an impending bust, a signal for investors to cut their losses?
“It isn’t as simple as that,” said Peoples. “There is still a significant number of people who come to Cambodia to seek out that lifestyle. In fact, many of our clients have expressly said that they want to live in a colonial villa, or an art-deco building.”
The demand is still there, he continued, but a significant reduction in rental prices around the Riverside is very probable in the near future.
“We can’t forget that the construction of around 40,000 new condominiums across the greater Phnom Penh proper will have an effect on the principles of supply-and-demand,” he said.
“I believe rental prices in Riverside can fall as much as 25 percent in the next few years if the number of new developments around the city remained unchecked because the invisible hand of the market will inevitably ‘correct’ the existing housing oversupply,” finished Peoples.