Between 2006 and 2008, property prices in Cambodia skyrocketed. By 2009 they had plummeted back to earth; furthermore several major projects were put on hold or cancelled, including the planned International Finance Complex. At the height of the madness, prices for prime land in Phnom Penh reached $5,000 per square metre; Siem Reap reached $1,000 per square metre, and beach front land in Sihanoukville experienced similar rises.By the end of 2009, prime land prices in Phnom Penh were down to around $2,700 per square metre and in residential areas prices were around $1,600 per square metre, down by 30-40 per cent. While many investors and speculators were local; a significant number were foreign. This in turn required mechanisms being put in place to hold title to land in a country where there is a constitutional prohibition of foreign ownership. Local partners are required to hold 51 per cent of the shares of companies established to hold title (Land Holding Companies). Various ‘protection’ documents are then executed to protect the equity interest of the foreign investor and limit the liability/obligation of the local shareholders. This way of acquiring land is the most commonly utilised method by foreign investors currently in Cambodia. Read More
