My first investment in overseas property and it’s in Cambodia!

Last week, I made a downpayment for my very first property investment in a country that most investors in Singapore have probably never considered before – Cambodia. My property of choice was a  freehold small office/home office, also known as SOHO in a 45 storeys tall mixed residential and commercial development mixed development in Phnom Penh called The Bridge Cambodia.

Why Cambodia?

Cambodia is one of the countries that I have shortlisted as a potential destination for retirement. The country has a rather impressive average of 7.8% GDP over the last 12 years. With 100% foreign ownership, competitive wages and tax incentives, Cambodia is ready for business. While most Singaporean investors are looking at investing in properties in Australia, Malaysia and the United Kingdom, I decided to jump on the Cambodia wagon to capitalise on first mover advantage and the low property prices in Cambodia.

How I selected my investment property in Cambodia?

When I was doing my research about investing in properties in Cambodia, I learnt that many property developments were
badly hit during the global financial crisis and some of them remained uncompleted to date. While this did not scare me away from investing in Cambodia, it was clear that the selection of a trusted property developer is of utmost importance.

Looking at the list of property developments that are in the market, I shortlisted The Bridge Cambodia because it is jointly developed by two prominent property developers – Singapore-based Oxley and Cambodia-based Worldbridge Land. Oxley Holdings Pte Ltd has a strong track record as a property developer and is listed in Stock Exchange of Singapore.

I went for the cheapest unit available

Coming from a low income family, I didn’t have a lot of capital in the bank. While I want to begin my first foray in the world of property investment, I don’t want to lose everything in one go.

After examining the entire development, I decided on a SOHO unit that costs around 110,000 USD that is able to house a small room for the Director and 2-3 office tables for Executives. This set up is perfect for foreign companies who are coming in with a small footprint to establish their presence in Cambodia.

6% guaranteed rental yield is a good start

One of the reasons why I was interested in The Bridge Cambodia is because the developer  offered a guaranteed rental yield of 6% for the first 3 years. While 6% rental yield is quite decent, the average rental yield in Cambodia is around 10%. It makes me wonder if I could get a higher rental income if I rented it myself or had a local property agent rent the property out on my behalf. That said, with no connections to trusted local property agents, I would play it safe and let the property developer manage the property for me.

How does this property investment change my investment strategy?

Previously, I have been making regular investments into the Nikko AM Singapore STI ETF with a good portion of my monthly income. With this property investment, I will stop making the regular investments in the equities market and hold on to the cash to meet the deferred payment required for the property.

My plan is to try to complete the property purchase with cash and try not to take a mortgage loan because the interest rates charged by Cambodian banks for mortgage loans are too high for my comfort.

Are you looking to invest in properties in Cambodia?

Are you also interested in investing in Cambodia properties and would like to get more information?

Please contact me with your questions and I’ll try my best to answer them and connect you to my trusted property agent to get you started.

Leave a Comment:

37 comments
The Buyer’s Guide for Cambodia property investment | Retire by 50 says December 5, 2014

[…] Below is a summary of the charges and taxes involved in my purchase of a SOHO unit in The Bridge Cambodia. […]

Reply
My 15HWW says December 11, 2014

Hi Mickey,

Wow. I am impressed. You must be pretty familiar with the country. I haven’t even been to the place before!

Just curious, what are your plans after the 3 years are up?

Reply
    Mickey J says January 28, 2015

    Hi Mr 15HWW, I can’t say I am very familiar with the country, but my travel adventure there has shown that this country has potential. My plan is to see how the rental market performs in the next 3 years and if it does well, I’ll most likely renew the additional rent management option that the developer may offer. If I manage to find a good property agent in Cambodia, I may even consider having the agent manage the property on my behalf.

    Reply
How Budget 2015 impacts my retirement plans | Retire by 50 says February 24, 2015

[…] Being a glass-half-full kind of guy, it just means I would have to either find a way to earn $200 passive income each month, or spend $200 lesser in order to maintain my monthly saving limit. I prefer not to reduce my monthly saving limit because I need the money to pay for the new property I bought in Cambodia. […]

Reply
If you want to retire, double your savings rate! says June 15, 2015

[…] year, I achieved a monthly Personal Savings Rate of 72.59% although most of that going into my real estate investment in Cambodia. With a small salary bump this year and a reduction in personal income tax, I increased my […]

Reply
Rainbowcoin says October 8, 2015

woah, that’s a pretty daring venture in a used-to-be communist state. USD 110,000 is a rather big commitment considering it’s almost same price as that of a small subsidized HDB flat. Is there an sg bank loan to take for it?

Hope this investment would pay off well in time.

Reply
    Mickey J says October 9, 2015

    You are right that it is a daring venture. I already own a flat so I only compared this investment with private properties in Singapore (which makes it insignificant). In any case, it’s high risks for high returns right? I would prefer to be a first-mover in an emerging market than a laggard in a developed market. As for loans, I don’t see any mortgage loans in Singapore and Cambodia that is attractive enough to consider to date, so it’s going to be fully funded by cash for now.

    Reply
Wilson says June 8, 2016

Hi,

Just read your post regarding your property investment in Phnom Phen.

I am living in Hongkong and recently have idea to invest in property in Phnom Phen. Similarly, I am just a white-collar with not much initial capital. Is it possible for a foreigner (not living in Cambodia) to apply mortgage for purchasing?

At present, is it still good for investing in serviced apartment type property?

Thanks!

Reply
    Mickey J says October 11, 2016

    Hi Wilson,

    I’m not really in the position to advise you on whether it’s still good to invest in serviced apartment type property. You probably want to get a real estate professional’s advice on that.

    It’s definitely possible for a foreigner to apply for mortgage for purchasing. However, the interest rate for the loan is quite high. That’s the main reason why I opted for cash payment instead.

    Reply
    Catrina says October 29, 2016

    Hi some developers might provide loan. It depends. Fully funded by cash is best options.

    Reply
Automating the investing process with OCBC BCIP and POSB Invest-Saver – Retire by 50 says December 12, 2016

[…] Unfortunately, the monthly cash investment is still very small as bulk of my savings is still going towards funding my Cambodia SOHO property purchase. […]

Reply
FC says December 14, 2016

how are you funding your monthly installments?
you opened a local bank account?
how do you plan to liquidate your asset, and take your profit back to SGP?

Reply
    Mickey J says December 15, 2016

    I’m funding the payments by remitting the money to the developer from Singapore. No local bank account was created.

    The current plan is to sell to investors in Singapore and get everything done in Singapore. That may change in a couple years time.

    Reply
Amy James says July 17, 2017

Sometimes real estate investing for beginners can seem a bit intimidating and it’s easy to get lost in the lights and sounds of all the blogs, books, and television gurus with their slick hair.

Reply
Jeff says October 26, 2017

If you don’t mind, could u give an update on how the property investment is currently doing? Is it completed? Rental started? How’s the property market like in Cambodia now?

Reply
    Mickey J says October 30, 2017

    Hi Jeff, the property has not been completed yet so rental has not started. I think the property market is not very hot if you compare to countries like Melbourne or even Thailand. At the end of the day for investors, it’s a wager on whether the country will boom in the next 10 years. 🙂

    Are you looking to invest in Cambodia?

    Reply
      JG says December 14, 2017

      A friend of mine also have The Bridge SOHO. After paying 40%, he decided to let go. He got the same local agent that sell him and sign a 6 months exclusive deal to get same agent to help him sell the unit. However, after 6 months, the agent still cannot find a buyer. Is it that hard to find a buyer??

      Reply
        Mickey J says January 21, 2018

        Hi JG,

        I’m not surprised. The Cambodia property market is not super hot like Malaysia and Australia. It will take a significant time to find the right buyer unless you are willing to take a big hit on the selling price.

        I can imagine myself having this problem as well if I need to sell the property today. I’m going to let the property ride out the next 3 years and see what happens after that.

        Reply
jason says November 28, 2017

I wish to get some advice on how to invest in Cambodia. Thanks

Reply
    Mickey J says January 21, 2018

    Hi Jason,

    I can’t say that I’m an expert in this market just because I bought 1 property. I’d say that do a lot of research about the country, economy and property developer (if you are planning to buy a property). It’s still very risky so only invest money you can afford to lose.

    Reply
Sangyoon.zepplin.lee@gmail.com says January 6, 2018

Do you think that they can be able to deliver on the promise of 6% return without any hickups also do you trust the Cambodian government? One day they can just say all foreign property belongs to the state. Im interested in the bridge retail mall thanks

Reply
    Mickey J says January 21, 2018

    Hi Sangyoon,

    One of the reasons why I chose to invest in The Bridge is because the property developer is a joint venture between Oxley in Singapore and a Cambodian business. That lends quite a bit of credibility because if Oxley fails in this venture, its stock price will tumble heavily. Just like me, they also have a lot to lose.

    Personally, I’m quite confident that they can deliver on the promise of 6% rental without hiccups but let’s see how it goes.

    The property TOPs in January and the rental will start in another 3 months time. Let’s see what happens.

    Reply
Wic Lai says April 3, 2018

Hi….
Been trying to sell my Soho in The Bridge but with no luck…. in the process of getting a loan from Maybank Cambodia…. if it doesn’t go through, I would to ask how much will I lose as I have paid 50%… thanks

Reply
    Mickey J says June 11, 2018

    Hi Wic,

    It’s best that you read the clauses in the contract. I know that there’s a 1% per month for outstanding and due amount. There are also termination clauses that you should be mindful of.

    Reply
    Johnny says August 10, 2018

    Hi, did you manage to sell your unit ? I am interested if you have not. Thanks

    Reply
The Peak Cambodia says August 13, 2018

yes, it’s a very impressive article. If you’re in the first time to investment property, invest confidently with the Peak. The property has a Partnership with CapitaLand and Shangri-La Hotel. Phnom Penh is filled with street markets where you can go shopping and use your bargaining skills. In fact, the Peak Cambodia Phnom Penh, which is a new Retail Mall will rise here and will be managed by CapitaLand Singapore.

Reply
Lyn says August 25, 2018

Hi how is your investment in Cambodia so far? Interested in The Peak project. What’s your opinion on this?

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    Mickey J says August 27, 2018

    Hi Lyn,

    I did a ‘mystery shopper’ stay at The Bridge last week (will write an article about it later on) and I think the rental business is still sound, though time will tell. I had the leasing agent show me around and the quality of the build and amenities are really nice. I’m pretty sure some of the more premium projects that are being constructed around the area and across the bridge on Koh Pich will be much nicer (and expensive).

    The Peak is adjacent to The Bridge, separated by a road junction. It really depends what you are planning to do with the purchase.

    If it’s for investment, I can’t say you’d definitely make money off it yet since the price is quite premium and most likely you’ll need to sell off to other foreign investors. I do see property agents showing PRC investors around The Bridge (most likely for leasing).

    If it’s for own use or stay, I’d prefer The Bridge over The Peak because of its north-south facing. The Peak has a better view over the river but its east-west facing means your unit will either get the morning or afternoon sun. That’s unavoidable.

    That said, I think the proposition of a nice view is very subjective because if the area becomes very popular, there are empty land parcels around both The Bridge and The Peak that buildings can be constructed. I already notice a building that has been constructed behind The Bridge that is blocking the view of several units on the condominium side.

    I’d say that you should only invest what you are willing to lose. 🙂

    Reply
T says September 2, 2018

Hi, interested to buy a small commercial unit at the peak. May I have some advice you from your experience and what you feel after visited the bridge. Thank you.

Reply
    Mickey J says September 3, 2018

    Hi, I feel that the location of both The Bridge and The Peak are rather decent. They are not exactly smack in the middle of business district. In fact, I find that offices are quite dispersed in Phnom Penh and there isn’t a dense central business district area so you can find businesses located in a few locations. That said, The Bridge and The Peak are definitely located in central Phnom Penh.

    The key differences between The Bridge and The Peak is that the Bridge has a good facing (no direct sun) while The Peak will have a better view of the river.

    That said, the inherent risk is that it could be challenging to find a seller and tenant after the GRR period ends.

    Reply
      T says September 3, 2018

      Thank you! would you be able to comment a little more on what you see i.e spending power at the mall?

      guess, this does be a deciding point for me to go or not.

      thanks again

      Reply
        Mickey J says September 4, 2018

        Surprisingly, there were quite a lot of footfall in the mall and it’s a mixture of expats and locals. I found myself wondering how the locals could afford to dine in the restaurants because they aren’t that affordable.

        That said, it’s just 1 mall. There are a few shopping malls that are being developed right now and the architecture looks really modern.

        Reply
          T says September 4, 2018

          A big thank you for all the good insights and views. Would you consider another investment there again??

          Reply
          Mickey J says September 4, 2018

          Looking at my current investment portfolio, purchasing another property in Cambodia would be allocating too much money in one market. So the answer would be no.

          I hope the information I have shared with you, have been useful.

          Reply
          P says September 4, 2018

          certainly you have.! A BIG THANK You! will try for one and see how it’s goes.

          Reply
          Mickey J says September 4, 2018

          If you have a chance to visit Phnom Penh, I’d definitely recommend checking things out on site. 😁

          Reply
          t says September 5, 2018

          will go and see if am there.

          have 2nd thought after your suggestion..lolx

          anyway, thanks for so frank and open in your opnion

          Reply
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