Siem Reap is one of the three major cities of Cambodia. The site of the world-renowned Angkor temples, Siem Reap is also the Kingdom’s leading tourist destination. As one of Cambodia’s leading economic centers, Siem Reap has drawn its fair share of local and foreign investors. Massive investments from abroad have fuelled a roaring property boom.
Siem Reap is in the middle of a building frenzy. In every corner of the city, many hotels, commercial buildings, and other real properties are going up. There are now more than 1,000 hotels, guesthouses, and other types of accommodations in the city compared to the more than 500 two years ago, leading to an oversupply in the market.
In spite of that, the city’s rental market is taking a hit. Rental transactions have gone down in the last few years.
According to Mario Tan, Sales and Marketing Director of Siem Reap-based Hunter Estate, the number of rental transactions this year declined by 40 percent, compared to two or three years ago.
“Before, we receive around 100 inquiries every month. But it went down to only 50 to 60 inquiries these days,” he said.
“And they are not even good quality inquiries,” Mr Tan stressed.
He said the current and prevailing trend in the tourism sector is making that happen. China has supplanted Europe as the leading source of visitors to Siem Reap. China sent more than 1.2 million visitors to Cambodia last year. Most of these visitors also went to Siem Reap, where Cambodia’s top tourist destinations are located.
“There has been an influx of Chinese arrivals, while the number of Europeans visiting the city has gone down,” Mr Tan pointed out.
Mr Tan claimed that the market as a whole is not benefiting from increased Chinese arrivals. “They mostly come with a tour group, and often stay in a tour company’s pre-arranged accommodation,” he pointed out.
“In this case, the small boutique hotels, guesthouse, and apartments, with 20 to 30 rooms, are few to zero customers,” he added.
Sek Saran, Business Director at A1 Real Estate Cambodia, echoed Mr Tan’s observations that rental transactions in Siem Reap are taking a big hit and going down.
“There are less Europeans, volunteers, and NGO staff that are renting apartments,” he pointed out.
Most visitors that come to Siem Reap these days, according to him, are Chinese. “Most of the time, they just come here for a short period. Also, many of them only go to the big and more luxurious hotels,” he pointed out.
For rent inquiries, he also noted that they have dropped down considerably in the last few years. “Rent inquiries dropped down more than 50 percent, compared to the previous years,” he said. With regards to rental price, there was also a significant decrease. According to Mr Saran, the rents went down by as much as 30 to 40 percent.
He said that an apartment unit that used to fetch $500 a month in rent can now be rented between $250 and $300. For serviced apartments, the same trend is happening. Mr Tan said that a serviced apartment that previously fetches between $500 to $600 a month can now be rented between $300 and $350.
“These have become much cheaper. But at least they’ve get some rents” he mused.
The downward spiral, however, did not reach most commercial areas in the heart of Siem Reap.
According to Mr Tan, a shophouse along the main road close to the Phsar Chas Market still fetches between $1,000 and $3,000 a month, which is an abnormally high price.
The two gentlemen’s observations were mostly shared by Sok Sarath, Managing Director of SiemReapLandhouse.com. “There has been less inquiries this year. This led to some owners closing their hotels and restaurants,” he pointed out.
But according to him, rental rates remain the same. He said that a 1 bedroom apartment fetches between $250 and $450/month. For shophouses and commercial buildings along National Road 6A, from Cambodian Cultural Village to Chong Keo Sue – $1,500 per flat rent/month; retail and banking space – $2,500 to $6,500/month,
“On Sivatha Road, from Sokha Hotel to Phsar Chas Market and Charles De Gaulle Road, from Royal Residence to Borey Prem Prey – $1,400 to $1,700 rent per flat/month. $3,500 to $6,500 rent/month for commercial banking space and Hotels with around 20 bedrooms in any location- maximum $4,500 rental fee/month,” he added.
Based on the current trends, experts said it will take a long time for the rental market to recover.
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