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WHAT IS DRIVING JAPANESE INVESTORS INTO CAMBODIA’S WORLD OF PROPERTY?

 

With seven years’ experience working for Japan’s largest bank, Mizuho, as well as having been a consultant for KPMG and SBI, Jun Takeguchi recently moved into the Cambodian real estate market.

Takeguchi, founder and director of AnnaCam Partners, spoke with Management Insider about the success of Anna Home, his 13-month-old investment and real estate company, Cambodia’s high-rise condominium growth, and the forces driving Japanese investors into the Cambodian property market.

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With your banking and financial background, what was it that prompted you to create Anna Home and enter the real estate market? When I founded Anna Home, I had already been working in Cambodia for three years processing micro finance loans. I watched the stability of the Cambodian economy, the developing infrastructure projects and the huge condominium units being constructed in Phnom Penh. As I observed the size of investment coming in from Singapore, Taiwan and Malaysia, I thought that this was the perfect time to provide opportunities for Japanese investors who wanted to diversify their assets while at the same time encourage the urbanisation of the city.

How does Anna Home operate?
We provide risk analysis for Japanese investors who want to purchase condominiums and residential units in Cambodia. As an officially registered real estate agency, we can buy and sell large properties. When we have a potential client come to us, we look through their portfolio, ask them how much they are willing to spend, and then guide them through the process of purchasing property on hard titles which they can then rent to Cambodians or expats, or sell when the time is right.

When a client expresses interest in purchasing property, what is the next step?
They fly over here to inspect the property to make sure it is what they expected. This allows them the time to see Cambodia’s potential. Once they purchase the property, we work with local real estate agents to find suitable tenants.

You entered into a market dominated by other regional players with a lot more investment. How encouraging have the first 12 months been?
It has been going good. I can’t say how many properties we have sold so far, but lets just say it is a sizeable amount. We are a small operation in comparison to others, but we are educating Japanese investors about the potential here. Japanese investors are very conservative, and getting them to take risks is always a challenge.

What is it that makes Cambodia a lucrative place to buy property?
One reason is that Cambodia uses the US dollar. That brings with it a lot of confidence. Cambodia is more resilient to inflation and depreciation. In neighbouring  countries like Thailand and Vietnam, who use the baht and the dong, unstable market conditions cannot generate enough revenue for Japanese investors to invest confidently. Another thing is that property costs are soaring. Compared to six years ago, the price of land has completely changed. Also the cost of labour and constructions materials has increased. This is a good thing because there is no sign of property slowing down.

How will the emergence of high-rise condominiums shape the future of Phnom Penh?
It is all about urbanisation and efficiency. Because of traffic conditions, it does not make sense to develop land outside of the city. High-rise condominiums provide a solution for a growing economy. Plus, young Cambodians are very receptive to foreign trends. They are very stylish and they see these projects being constructed and want to be able to live in them one day. In this way, Anna Home is committed to bringing modern living standards to Phnom Penh.

Why are Japanese investors increasingly turning to Cambodia?
The Japanese economy is facing a lot of problems. With the declining value of our currency over the past few months, they are turning to solid long-term assets abroad. In this way, property is like owning gold or a bond. It is more secure. Another thing is that our domestic market is shrinking because of the lack of population growth. In 10 years, the lack of population growth will become critical. This means that there will be an increase in capital flight and a lot more money will come to places like Cambodia.


Text & photograph by Kali Kotoski