An opinion piece originally written by a Chinese blogger and submitted by Lady J
There is a direct flight from Shenyang to Sihanoukville. After getting off the plane, the first impression is that the international airport, for what is the second largest city in Cambodia, is very small, almost the same as the high-speed rail station in the third-tier cities in China.
The people who came to pick us up quickly helped us to apply for the visa on arrival, and the time to leave the airport was shorter than the time of the subway station in Beijing.
I got to know that it was the visa company they were looking for, so soon, the normal visa is around $60, and many people still fill in the immigration card at the airport. Of course, if you leave a tip, it will be finished soon. This is to be expected.
The airport is about 30 minutes from the city. It is dusty all the way. On both sides of the road, except the hills and mountains, it is a construction site stretching into the distance.
Just entering Sihanoukville is a little traffic jam. There are motorcycles and tuk-tuks in the gaps. After driving into the main street, I feel that there are not many people in the city. The road is not wide and looks yellow and white. The asphalt road feels like a small town in China more than 10 years ago.
Most of the shops are Chinese shops, Shaxian snacks, Sichuan cuisine hot pot, Northeastern restaurant, barbecue shop, a wide variety, as well as supermarkets, hotels, Poly Real Estate, etc., like the domestic brands in China.
On the map, the city is really small. There are three main roads and two squares, which are connected to various small roads.
On both sides of the road is dust from the construction sites and construction vehicles.
It is said that there were almost no high-rise buildings here three years ago. In the past few years, the whole city is like an unfinished construction site. If you leave for a while, there may be many places that you don’t know.
I used the map to find a comparison of the previous photos, and I feel that the changes have turned the place upside down.
Westport (Sihanoukville) has land, sea and air ports and famous beach resources, and its status is equivalent to Shenzhen in China.
A few years ago, the population here was less than 100,000, and now there are more than 230,000.
I have learned that about 5,000 people come to Xigang (SHK town) every month. The rent here is higher than that of Beijing. People are still busier than Guangzhou.
There are many casinos and gaming industries here, and the development of real estate and hotels is also blossoming everywhere.
The rent here is also very high, 50 US dollars per square meter per month, a 50m2 apartment is equivalent to 17,000 yuan per month.
Who can afford such a high rent?
This is also my biggest concern. I visited a large number of development business owners, the largest local builders, casino owners, intermediary companies, entertainment operators, gaming practitioners, material suppliers, catering operators and locals.
First of all, I learned about the housing needs of local people.
Due to the small change in local temperature, the annual average is 27°; the income level of local people is also relatively low, most of them live in terrace houses and some are wooden. I asked a few local people, there is no family planning policy, most of them are two generations of the same family, usually 4-7 people in each family, the average age is 27 years old, such a family structure and 35 years ago in China The family structure is similar.
There is demand, but due to limited income, such demand has not yet fully manifested from the scale of the market, and it is used to the townhouses. It takes time to accept high-rise buildings. The rapid economic growth in recent years has only just begun to increase the demand for local buyers.
Mainly the foreign population supports the local high rents.
Westport has people from China, France, Japan, South Korea, Russia and other countries to invest and manage, including the largest number of Chinese.
I will start with several industrial structures:
One Belt and One Road Model Project
In 2013, Hongdou Group invested as the first batch of overseas economic and trade cooperation zones in China, “Sihanouk Port Special Economic Zone of Cambodia”, covering an area of 11.13 square kilometers, planning textile and garment, luggage and leather goods, hardware machinery, wood products and future mechanical equipment. The building materials industry is developing.
Xigang Special Administrative Region is 3 kilometers from Xigang International Airport and 12 kilometers from Sihanoukville Port. It is close to National Highway No. 4, with convenient transportation and low logistics costs. At the same time, Xigang Special Administrative Region and the resident enterprises have provided free Chinese training to the local people. The locals have learned Chinese can get more than 300 US dollars in monthly salary when entering Chinese companies, which is more than twice the local income.
The lower labor cost can solve the economic development of local employment. If the products produced in the park are used for export, the export tax is free. On the import tax, the machinery, construction materials, spare parts and raw materials used for production are also tax-free. There is also a reduction in VAT.
The enterprises in the park purchase production equipment, building materials, etc., and the VAT rate is 0%. If the raw materials serve the export market, the VAT rate is 0%, and the industry that serves the domestic market has a VAT rate of 10%. In addition, in the corporate income tax (profit tax), the park enterprises can obtain a tax holiday of 6 to 9 years, and the income tax rate after tax exemption period is 20%.
Convenient transportation conditions, low operating costs, and generous taxation policies are like Shenzhen in the early days of reform and development, attracting a large number of enterprises to be stationed here. There are people from all over China everywhere. Sometimes you don’t feel like you are abroad, but like somewhere in the country.
Rich oil reserves
About 170 nautical miles south of Sihanoukville Port, oil was explored in the Cambodian waters in 2016. The proven oilfield reserves reached 2 billion barrels and the area reached more than 6,300 square kilometers.
This is only the proven reserves of one of the oil fields, and it is predicted that the total reserves in the oilfield area will be astonishingly large, and it is said that it can be mined for 40 years. In the oil block A of the Cambodian sea area, four international oil companies originally acquired exploration and mining rights, and China invested in the construction of the first oil refinery in Cambodia.
Cambodia’s domestic oil and gas development has just begun. It has relied entirely on imports from countries such as Vietnam, Singapore and Thailand. After the completion of the oil project in Area A, Cambodia will change from a current fuel importing country to a fuel exporting country. There are already many oil companies in the world listed here.
Crazy gaming and entertainment industry
Xigang karaoke, bathing, and casinos stand shoulder to shoulder. Bars and hotels are scattered all over the streets. Many small islands have been invested by developers from various countries to develop casinos and luxury hotels.
Many countries do not allow online gambling operations, and Cambodia is one of the few countries that are approved by the government to be allowed to access online gambling.
For a time, almost all online gaming giants, investors, participants, and gamblers from all over the world came to Westport. It is said that Westport has gathered nearly 100,000 people in the gambling and entertainment industries.
I have no interest in gambling and I don’t know. I only know that gambling in mainland China is illegal.
I almost traveled to the Westport Casino to find out who is gambling here.
Later, I learned that under the casino line gambling and online gambling, we can see offline casinos.
Most of them are gamblers who have come from casinos in Myanmar and the Philippines in recent years. A small number of them are in Macau and other countries. But the amount of gambling is not as large as Macau. Some gamblers are tourists and do business and work locally. people.
I have seen several places in online gambling, similar to domestic Internet cafes: full house computers and staff, the gameplay is similar to buying lottery tickets.
Some of these years have been illegally operating online gambling and fraud, and every month people are taken away by domestic law enforcement agencies.
Some people say that Westport is building a second Macau. If it is operated and managed, maybe!
Odd high rent
How is the high rent of Westport formed?
The three industries I mentioned above (manufacturing, energy, and service) are the largest group supporting housing prices and rents.
The local population is small, and there are too few houses suitable for local or foreign residents. Therefore, as long as new properties are delivered, they will be rented out immediately, and even during the construction process, many people will pre-lease.
The price ranges from $1,200 to $3,200. Payments are paid in proportion to the construction schedule, usually for two years. They are simply furnished apartments and sell hard card property (permanent property).
The rent is 25$-50 per square meter per month. Due to the high return on investment, many houses here are bought by friends around the developer.
Zhou Zong, a development company in Beijing that was laid out in Xigang a few years ago, said that from the acquisition of the land to the present, he witnessed the market situation of the Westport people who have fewer houses and less supply. In the past two years, the price of land prices has doubled, and she has to bring herself every month. Friends come here to buy a house.
Who are you investing in?
I visited most of the sales offices in Westport and learned that there are about 17 properties for sale in Westport.
There are very different phenomena from the domestic market, and there are very few salesmen. On average, there are about 3 people in each sales office, and there is no demonstration area. Most of the no-model rooms are pure-term houses, and there are not many overseas distribution channels that refer to customers every day like other countries.
Most of the apartments sold here have casinos. The advantages of casinos are just like the domestic subway houses or school districts. Apartments with casinos usually sell faster.
I talked with the sales staff at the scene and the local intermediaries about the sales speed here. They told me that the people who come here to buy a house are not the same as other investors. If you buy more than one set or a dozen sets. Their logic is: investing in business, not just real estate.
Cambodia has no foreign exchange controls and is settled in US dollars. Westport also has a variety of tax policies and energy and port economic efficiency, attracting large quantities of entry. However, it has not yet been known to the public, and there are many investors in the north, Shanghai, Hong Kong, Macao, Taiwan and Japan.
Land status and urban development
Walking through the streets of Westport, there are constantly various engineering vehicles passing by, and the road is dusty and construction noise.
I chatted with Han, an interior architect from Tsinghua University. He said that it is now a developer from all over the world, resulting in a large number of rough buildings. This is a retrogression of culture and an inevitable process of economic development. There are a lot of chaos in the industry, just like the spring bamboo shoots and poisonous mushrooms sprouting at the same time. After the sun shines, the spring bamboo shoots are straight and the poisonous mushrooms are dried and dried. In the next 5-6 years, it will be a scene of a metropolis.
From the perspective of urban planning, if the city does not have scientific and rational planning and strict development system, no matter how good the economy is, it will not become an international metropolis.
Westport also has seaports, ports, oil and sea resources, and there is not much land available for development in the main city.
I have looked at a few plots, all of which are around 500-2000 m2. The larger plots are few and the price has increased several times.
There is no floor area limitation here. In the past two years, the development land of the sea has limited requirements (limited to 6 floors), so Chinese developers are willing to come here for development.
In addition to the industrial economic support, there is no such thing as the floor price, which is naturally superior to China in terms of land cost.
Now, the development of Xigang is similar to that of China: the development of industry and port economy in the northeast, the development of a recreational airport economy in the southeast, and the development of Gaolong (Koh Rong) Island in the west.
There are still a lot of undeveloped land in these three areas, and land prices are also rising.
Net company Alibaba also wants to buy islands in Westport. Although the news may not be true, the land price has really risen.
In addition the first expressway in Cambodia, which is invested and operated by China, is being built. Xigang is also repairing the roads connecting the main city in all directions. The three elements of land value: resources, transportation, and population have gradually taken shape.
The most promising tourism resources
In the main city of Westport, I really didn’t see any decent tourist resources. I felt that there were only two hotels with good beaches.
The day before I left for Hong Kong, I came to Gaolong Island, which is known as the hidden heaven.
Gaolong Island covers an area of 78 square kilometers, which is larger than the area of the main city that has been developed in Xigang. The island is still building roads and there is almost no municipal support.
There are very few people on the island, mainly Europeans and Americans. And there is no tour group! There are no guides, just like what is said on the Internet: it is a resort for backpackers.
The sea here is really clear and the beach is beautiful. I never thought that I could walk alone on such a beautiful beach, in stark contrast to the bustling crowds of the Westport casino.
I ate at a Chinese restaurant on the island and chatted with the restaurant owner, Marco. Marco is a native of Hubei. He has been in Westport for more than a year. He said that the reason why he went to the island to do business is to see the resources on the island: the beach here is one of the few unexplored islands in the world, and the world’s top ten most beautiful. Sandy beach and ecological jungle. He sent me a map of the island and told me the basic condition of the whole island. I immediately flashed it in my mind: this may be the next Phuket or Bali.
Opportunity and lack of elites
I have been in Cambodia for nearly half a month and have met more than 50 new friends from all walks of life. Thanks to the help and explanation of these friends.
One that has been doing real estate in Cambodia for five years tells me that Cambodia is now an opportunity and the industry is becoming more formal, but it is lacking. After all, this is one of the least developed countries in the world. “The people who came here originally came from China or other countries, and there were people who ran away from the countryside. These people were very keen but lacked professionalism and could not work completely independently, resulting in no one left here. There used to be a Chinese The company sent dozens of people, and after half a year returning home, they were dug and dug. So if you want to invest or develop in Cambodia, you must have a strong will, and the company must have a reasonable distribution mechanism.”
These days I am also thinking: Who is here to develop?
My analysis is mainly three types of people:
One type is big, because the big layer and sharpness and financial strength have obvious advantages in this layout;
The second category is urban development practitioners, because it requires a large number of people in all aspects of urban development;
The third are people from the countryside.
Here, as long as you follow the rules and have a sense of safety, you will reduce the risk of danger; here, as long as you can pay for sweat, you may get more income than anywhere else.
Cambodia is a country full of opportunities and challenges but extremely lacking in elites. The country enjoys a superior geographical position, abundant resources, open policies, sparsely populated land, and gradually changing its concept.
As a city in Cambodia’s economic climate, Westport has many advantages: port, oil, tourism, industry, and policy dividends…
Westport construction has just begun, and the speed may be beyond our imagination.