Dara Sakor

LONG BAY

Economics in Cambodia

Cambodia is a developing country driven by tourism, processing industry, construction industry and agriculture, and the contribution of tourism plays an important role. Per capita income was $1,560 in 2018, and the average growth rate over the past decade was 114.78%.

According to the ministry of tourism, Cambodia ranked third in the growth rate of international tourists in the association of Southeast Asian nations in 2018, just behind Vietnam and Indonesia. In 2018, the number of international tourists in Cambodia increased 11% over 2017, to 6,201,077.

What’s more, the length of stay also increases significantly in the past decade. The average length is 7 days, which shows that the tourism environment of Cambodia is more attractive and may leads the potential demands for foods and accommodations to grow. In a country with such worth expecting future and unsaturated tourism market, everyone is trying to grasp the chance and create profits.

Cambodia is the only Asian country that both the domestic currency and US dollar are circulated. Cambodia is known as “little Switzerland in southeast Asia”. It pursues a 100% free economic policy and has no foreign exchange control.

Cambodia Real Estate Investment Analysis

Investors are usually familiar with where they sit, so estate or price are more easier to be confirmed, however, it is more complicated in overseas real estate investment. Because investors should study the local political, legal, economic, income, housing purchase habits, supply and demand, and so on.
2018 Average rental return
City 2018 Average rental return
Shenzhen 1.42%
Shanghai 1.49%
Beijing 1.58%
Guangzhou 1.72%
Hong Kong 2.30%
Singapore 2.54%
Paris 2.66%
London 3.45%
New York 3.58%
Tokyo 5.50%
Ho chi minh 5.56%
Phnom penh 6.92%
2018 Gross Rental Yield and Rating
Ranking Country / City Gross Rental Yield (% per annum) Yield Rating
1 Moldova, Chisinau 10.00% Spectacular
2 Jamaica, Kingston 9.75% Excellent
3 Egypt, Cairo 9.40% Excellent
4 Ukraine, Kiev 9.09% Excellent
5 Jordan, Amman 8.82% Excellent
6 Tanzania, Dar es Salaam 8.57% Excellent
7 El Salvador, San Salvador 8.49% Excellent
8 Bahamas 8.16% Excellent
9 Ecuador, Quito 8.04% Excellent
10 Nicaragua, Managua 7.70% good
30 Barbados, St James 5.48% Moderate
31 Portugal, Lisbon 5.45% Moderate
32 Croatia, Zagreb 5.43% Moderate
33 Lithuania, Vilnius 5.39% Moderate
34 Cambodia, Phnom Phen 5.33% Moderate
35 Hungary, Budapest 5.24% Moderate
36 UAE, Dubai 5.19% Moderate
37 Thailand, Bangkok 5.13% Moderate
38 Slovenia, Ljubljana 5.13% Moderate
39 Martinique, Fort-de-France 5.12% Moderate
40 Bulgaria, Sophia 5.12% Moderate
Source:Global Property Guide

Investing REATs

Corporate financing is generally divided into indirect financing, such as getting a loan from Banks, and direct financing. Direct financing is about issuing securities, such as stocks or bonds, as well as securitization of financial assets and fixed assets.

The securitization of real estate including“Real estate investment trust (REIT)” and“Real estate asset trust (REAT)”. And REAT means a trust established pursuant to the provisions of this Act, by which trustors transfer their real estate or relevant rights to a trustee to issue REAT beneficiary securities to non-specific persons through public offering or deliver REAT beneficiary securities to specific persons through private placement, evidencing the beneficiaries’ rights to the real estate of such trust, relevant rights, or profits, interests, and other proceeds accrued therefrom.

REIT and REAT both are enacted for the purpose of developing national economy, improving the liquidity of real estate through securitization, providing additional fund-raising channels for real estate so as to efficiently develop and utilize real estate, promoting environmental quality, activating the real estate market, and protecting investment.

Taiwan enacted the real estate securitization regulation in July 2003. On June 10, 2004, Taipei international commercial bank was entrusted to manage the asset trust of Jiaxin international Wanguo commercial building. On March 10, 2005, Fubang no.1 real estate investment trust was issued.

References

Source: Financial Supervisory Commission

PDF Document Download

1. Clauses of the Real Estate Securitization Act (2017.12.06 Modified)

2. Enforcement Rules of The Real Estate Securitization Act (2009.06.19 Modified)

3. Regulations Governing the Public Offering or Private Placement of REIT and REAT Beneficiary Securities by a Trustee (2019.04.08 Modified)

4. Regulations Governing Information to be Recorded in the Prospectus by a Trustee Offering Beneficial Securities in a Real Estate Investment Trust or Real Estate Asset Trust(2018.08.21 Amended)

5. Regulations Governing Information to be Disclosed in Investment Memorandums for Private Placement of REIT or REAT Beneficiary Securities by a Trustee (2010.02.12 Modified)

6. 財政部委託專門職業及技術人員查核不動產證券化關係人辦法 (發布文號:台財融(四)字第0924000882號)

7. Regulations Governing Public Tender Offers for Real Estate Investment Trust Beneficiary Securities(2017.08.11 Amended)

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