Real estate experts said yesterday that news that the government may allow non-Cambodian citizens to own a large majority of apartment buildings under a new foreign ownership law could go far in encouraging international property investment in the country.
Nonn Pheany, spokeswoman for the Ministry of Land Management, said yesterday that the ministry recently sent a proposal to the Council of Ministers allowing foreigners to own up to 80 percent of a building.
King Norodom Sihamoni signed the Foreign Ownership Law late last month, allowing foreigners to own property in a building above the ground floor. Private sector observers noted, however, that it would draw little actual investment until the government decided exactly how much of a building foreigners could own. Though early drafts of the law capped the foreign stake in any building at 49 percent, lawmakers eventually decided to let the Council of Ministers settle the matter with a sub-decree.
“Our target is the wealthy people, not the poor,” Ms Pheany said. “We do it to attract dollars.”
Ms Pheany said the proposed sub-decree was now being reviewed by the Council of Ministers and did not know when it might be approved.
“We cannot tell [the date]. It is not in our hands now but in the Council’s,” she said.
Sung Bonna, president of Bonna Realty Group, welcomed news of the proposed sub-decree.
“The more you can open [the market] the better, because our goal is to attract foreign investment,” he said.
If the government were to limit foreign ownership to less than 50 percent, Mr Bonna said he worried developers would not be able to fill their buildings.
“Below 50 percent, it would be much harder to fill the buildings,” he said. “The lifestyle of the Cambodian, they like to stay in the villa.”
“It’s an encouraging figure,” agreed Tan Hong Kiat, country manager for real estate consultancy firm Knight Frank. “It should be good news for most developers.”
Like Mr Bonna, he said high-end investors are unlikely to find enough demand to fill their buildings with Cambodians property owners alone.
By letting non-citizens own more than half a building, he said, “you’re probably creating a more investment friendly environment for foreign investors.”