Mr. Mert Eren’s Interview: Kampot steals spotlight as new tourism, investment hub

Kampot steals spotlight as new tourism, investment hub

James Whitehead / Khmer Times

The Durian roundabout is an iconic landmark of Kampot town. It pays fitting tribute to the area’s fertile soils and climate, which make it ripe for growing the much-loved fruit. Kampot Provincial Administration
 

Until a few years ago, Kampot was synonymous with a sleepy small town. Not anymore. Dramatic transformations in the province have already attracted many investors. Of late, it has become one of the nation’s favourite tourism destinations: over 400,000 tourists descended on the coastal city to celebrate New Year. Major brands like Starbucks and Brown cafes have started operating, in addition to the growth in the real estate sector with prices sky rocketing. Industry insiders say, there are greater things to come in terms of tourism and investment with the province playing a key role in Cambodia’s wider economic aspirations

In the last three years, Kampot province has witnessed marked growth in terms of population, commercial investments and infrastructure development.

It has also risen to become one of the nation’s favourite tourism destinations, this International New Year seeing Kampot province becoming the leading destination for count-downers, hosting approximately 400,000 guests, more than both traditional tourist towns Sihanoukville and Siem Reap, respectively.

Interestingly, this growth has come despite a general economic slowdown nationwide and a period of significant fluctuation in Kampot local land prices. It suggests a testament to broader changes ongoing in the province since as early as 2018, and continuing into 2024.

Well-known big city consumer brands are also increasingly setting up shop in Kampot city, such as Starbucks and Brown cafes at the close of 2023, along with a host of corporate financial service providers and insurers. These new entrants signify increased demand for their consumer goods and services by Kampot-based clientele in 2024, and the future opportunities presented by the province.

World-renowned cafe brand, Starbucks, officially opened in December 2023, taking a prime position along the centre of Kampot’s riverfront promenade in the heritage building and icon of the city’s past. Lina Nang

According to industry insiders, the recent favourability of the coastal city of Kampot is a sign of greater things to come in terms of tourism, investment and the province playing a key role in Cambodia’s wider economic aspirations.

Therefore, the bigger question is what’s driving Kampot’s economic growth in 2024, and what the province will offer in the near future as a residential, commercial and tourism hotspot of the Kingdom.

Neo Kampot

According to Mert Eren, local real estate business person and resident of Kampot city, “It is necessary to forget about Kampot’s old small town status.”

“This city, which was not included in the tourist routes or expat destinations in the past, has now become very well-known to all kinds of travellers,” he said to Khmer Times.

“During 2016-2019 when mass Chinese-investment was taking place in Sihanoukville and Nationwide in Cambodia, land prices rose rapidly in Sihanoukville Province, and led to a sudden migration of those Khmer who sold their land when the Sihanoukville region reached 80-90 percent saturation.”

“At the same time, expats who lost their workplaces or rentals in the rush from Chinese buyers, and foreigners who no longer wanted to stay in Sihanoukville due to the changing environment, also packed their bags,” he said.

Aerial views of Kampot city and the popular Riverside district. Kampot Street Real Estate Company

“Most of this migration that took place was towards Kampot,” explained Mert, who himself relocated from the islands of Sihanoukville to begin a real estate and development business in Kampot around five years ago, during that boom period.

“The high-investment period reflected a peak for land prices in Kampot also, with local sellers speculating that more Chinese capital would soon reach the seaside province, following the Sihanoukville rush. This period also stimulated demand for financial capital services inside the province from local land buyers, who borrowed to invest in more land alongside the rush,” he explained.

As of 2024, however, prices are settling down again, but the coastal province’s popularity remains, confirmed Mert, who believes the province’s next growth spurt is just around the corner.

Pensioners paradise

Along with regional immigration, Kampot has also seen an influx of international expat residents seeking a retirement destination for the mid-to-long term, according to Sok Ken, owner and operator of long-running real estate agency, Kampot Street Real Estate Co., Ltd., located in Kampot city.

“Kampot has witnessed an influx of international retirees in the last few years, and considerably more than we saw moving in during pre-Covid periods,” said Ken.

Many pensioners from Europe, America and other western countries have been attracted to Kampot in recent times for the relaxed and calm atmosphere of the province, along with the affordable costs of living.

“With their pensions or savings, expats in Kampot are able to comfortably afford rental properties from $150 to $500 per month, or more for more luxurious properties, along with enough money left over every month to enjoy a good quality of life, in terms of food and beverage costs, medical care and local travel,” said Ken, himself born in the province.

An aerial view of the Kampot Tourism Port in Kampot province, in progress in 2023. Ministry Public Works and Transport

Kampot rental rates are much more affordable than cities like Phnom Penh, along with a more peaceful setting for living.

“Some, with more savings, also invest in land and houses, along with local partners. Land and house properties in Kampot can start as low as $10,000 to $20,000 for small homes and plots, and allows very affordable long-term costs for permanent expats in Kampot,” he said.

“Increasing costs in their own countries are also another reason behind the trend,” he explained, “meaning a higher quality of life while spending the same, or less.”

According to Internationalliving.com, a website that reviews countries for expats to emigrate to worldwide, “the [Kampot] city centre is very easy to navigate with many preferring to get around by foot or bicycle since so many places are conveniently located close to the river.”

Another important factor that needs to be factored in is English is widely spoken in Kampot and has long ago replaced French as the most popular second language with it being commonly used by almost everyone working in tourism, hospitality and among the newer generations who make up most of the nation’s youthful population.

Importantly, the website notes, “Cambodia not only offers reasonably priced and accessible annual retirement visas but also has the unique advantage of using the US dollar alongside its national currency. This makes it much easier for expats that run their own businesses as well as retirees who rely on income from overseas pensions.”

In recent years several national, regional and international banks, as well as various microfinance institutions, have launched full-service branches in Kampot while also increasing the number of standalone ATMs at useful locations all across the city, noted the online journal.

Kampot also has a unique colonial history, which is visible from its many historical buildings, such as houses, markets, cinemas, schools, roads and hospitals which are all evidence of the French colonial era, a significant attraction to tourists and expat residents.

Kampot City was listed as a UNESCO World Heritage Site in 2017 in order to ensure this unique architecture and heritage is maintained for years to come.

Consumer commerce

Alongside residents, Kampot has also attracted a host of new consumer brand outlets to the city in recent months, including cafe brands such as Starbucks and Browns, along with many international corporate providers such as banks, MFIs and insurance firms.

World-renowned cafe brand, Starbucks, officially opened in December 2023, taking a prime position along the centre of Kampot’s riverfront promenade in the former-fish market building, a heritage building and icon of the city’s past.

Browns Cafe, Cambodia’s most well-known coffee franchise, also opened its doors in Kampot in late 2023, revitalizing a 100-year-old colonial building along the main riverfront for its purposes.

According to Ken, these brands and others like them are seeking prime positions in areas seeing increasing tourism traffic, hence why the riverside area has been chiefly targeted, and the majority of income is likely coming from domestic and international tourists to the city, rather than local Kampot consumers with generally lesser spending power.

Meanwhile, many local owners are seeking to prepare their rental properties to better suit corporate entities such as banks and insurers or hoteliers, and achieve higher rental prices for longer rental periods, mentioned Ken.

“For tourism businesses, there are also many turn-key business opportunities throughout the province, whereby local property owners holding assets such as hotels, restaurants and other potential business properties, are open to long-term leases with strong operators, due to inability or lack of extra capital to manage the business themselves,” he said.

There have been hundreds of new hotels and guesthouses built in recent years but haven’t evolved into full-fledged businesses, or stalled due to financial constraints.

Ken mentioned that by investing in pre-existing turn-key business properties such as these, tourism and other business operators can start to profit from the assets in Kampot almost immediately, given they have the necessary business experience and staffing requirements to get the properties active with consumers.

Land prices

According to Ken, as of 2024 general properties in the city and province have seen a significant drop in prices, as much as 50 percent compared to peak 2019 and 2020 rates.

According to Ken, 90 percent of transactions happening in Kampot at present are from land investors or commercial entities from Phnom Penh taking advantage of lower prices and increasing opportunities, rather than local Kampot buyers which has stagnated due to a lack of capital in the pockets of Kampot locals after the covid period slowdown.

“Land prices along the riverside have stayed pretty much the same throughout the last few years, however, not reducing despite an overall economic downturn,” said Ken.

The reason is, local owners are well aware that riverfront property represents the prime location for commerce in the province, alongside growth in the local and international tourism market, noted Ken.

Many investors see riverside properties as valuable in the long term given the tourism development bringing more and more guests to the city.

Riverside properties have maintained a high value despite fluctuations in general land prices over the last five years and points out the strong future for the city in terms of a tourism and logistics champion of the coast.

“Kampot maintains a treasure value that will be in demand again in the future,” said Mert, believing that the province is set to see much more price growth into the near future with the improvement of tourism and overall commercial infrastructure.

Mert believes prices will grow again and likely attain similar levels seen in 2019, therefore more affordable plots being offered in 2023 and 2024 across the wider city and province reflect a great chance for investors to buy into the market before its next climb.

Infrastructure projects

Industry insiders agree that major changes are coming to the sleepy tourist town in the coming years, which could dramatically change the economy’s dynamics.

The ‘Kampot City Land Use Master Plan for 2030 Vision’ was officially adopted in 2018 by the Royal Government of Cambodia, under the authority of the Ministry of Land Management Urban Planning and Construction.

Since the release of the plan, the city has seen the development of new ring roads, bridges and connecting artery roads to neighbouring provinces.

In 2023, the city also saw the development of a network of new white sand beaches across the city’s riverfront, toward Kep, which has increased the capacity of the region as a standalone beach destination dramatically.

“Infrastructure is definitely one of the most important issues. But in this regard, Kampot is very lucky because of the new governor of this period. He tours the entire city step by step and the governor’s teams immediately intervene, especially regarding the road,” said Eren.

“A city with quality roads and problem-free infrastructure is always in demand and this turns into an investment,” he said.

Travelling from Phnom Penh to Kampot via National Road 3 also has become much easier for domestic-bound tourists thanks to a nearly 135-kilometer road improvement, inaugurated in March 2022, backed by a Chinese grant.

In addition, National Road N33 was created to connect Kampot town with Kep, and National Road N31 was installed to connect Takeo province with Kampot province, further positioning the province as a logistics hub and easy destination for weekend travellers from the capital.

Meanwhile, Ken and Mert both believe that larger-scale developments already underway will change the city’s prospects as an international tourism destination dramatically in the future, citing the Kampot Tourism Pier and deep sea port, nearing completion, and the Funan Techno Canal project earmarked to be complete in around four years.

The Kampot Tourism Pier in Teuk Chhou district is located six kilometres from Kampot city and is expected to be completed in coming years, the initial phases completed already. However, some delays in the port’s opening have followed setbacks caused by the Covid pandemic and plans to deepen the port to accommodate larger vessels.

Once operational, the project is expected to play an important role in developing coastal tourism in Kampot and Kep provinces and connecting coastal tourism in Cambodia with Koh Tral (Phu Quoc) in Vietnam.

The Kampot-Koh Tral (Phu Quoc) ferry route will open the door to more than eight million tourists visiting Koh Tral annually for easy access to Kampot province as well as other major tourism destinations in Cambodia, via linking logistics networks. The route will also facilitate fast and convenient travel from Cambodia to Koh Tral and its extensive beach tourism facilities for both national and international visitors.

Over time, the port is expected to facilitate seaborne tourism between Cambodia and Thailand and additional ports in Vietnam, offering international tourists a new way to travel to and from Cambodia and enjoy the country’s virgin coastline and pristine beaches.

Meanwhile, the government-approved Funan Techo Canal, currently undergoing planning and feasibility considerations, will be the first capital to the coastal waterway in the Kingdom of Cambodia and will allow a connection from the Bassac River in Phnom Penh, via Kampot, ending at the sea mouth in Kep province.

The estimated cost for the development project is expected to be $1.7 billion and it will take approximately four years to complete after it begins construction in the fourth quarter of this year, including new roads along the sides of the shipping canals. After the instability caused by Covid ended, tourism has started to revive, and better things – major investments are expected to follow soon.

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