Sung Bonna at one time was homeless and poor, working at a fast food restaurant. Now he owns one of the largest real estate agencies in Cambodia.
Orphaned by the Khmer Rouge, the entrepreneur said he slept in garages and at friends’ homes in the early 1990s while he worked at Lucky Burger as a cook and was later promoted to supervisor. In 1997, a friend encouraged him to become a real estate agent, telling him all he needed was a mobile phone and a motorbike. In 1999, he started Bonna Realty, setting up an office with an unconnected landline phone for show on his desk and about $250 in his pocket. Sung Bonna recently spoke with The Cambodia Daily’s Kay Kimsong and Tim Sturrock about property value bubbles, local development and the future of real estate in Cambodia.
Q: How will the national election in July affect the real estate market?
A: it looks OK. During this time, it’s not like it was before. Everyone feels, even my feelings and some investors also feel, that it’s no problem.
Before with elections, for almost six months or eight months it was already quiet in the property sector. This month, there’s still actively because everybody feels that nothing will happen-they don’t feel worried or anything. There are one or two out of 10 people who have some feeling, but the other eight says it’s OK.
Q: With land prices rapidly increasing, are you worried about the creation of a bubble in the market?
A: This one of the worries-not just for me-but for some other people also. We are worried but so much worried for the whole country. The thing that we’re worried about is the outskirt properties, outside like in the provinces.
But the in-town properties are not a worry, even if it’s jumping too high. Why are we not so worried? Because we’re thinking the development is still continuing…
Also the economy has demand. The demand, what we are talking about demand is, for example, Cambodian people still need a lot of nice houses, still need a lot of offices. We don’t have a good office supply yet for example, like some businessmen or restaurants want to get a good [commercial space] to occupy or find a nice restaurant to eat. We don’t have such good things like that yet. Now people need it but don’t have it yet. So the commercial property is still needed.
And like the hotels. The tourism number is increasing and increasing but the number of hotels is not enough…
There are old houses and number of people that say in one building with a lot of familys-like one shop house with three stories but it has like 10 families. These people, they are planning to move to independent homes. Because Cambodian culture before, one family, like the grand father, they own one property-the son, the grandson, everyone stays together. Like 20 or 15 people stay together.
But now people are trying to move, to separate, to live independently when they become couples. They want to have an independent house, so it’s not like before.
Q: Do you think Cambodia and Phnom Penh have a clear plan for developing real estate?
A: Actually, the planning and ideas it has, but the practicing and the doing it depends… for example, the plan is to begin construction on one road in the next six months and complete it in the next 12 months, but it may delay. It may change. This kind of thing is what we think is affecting the property market.
And also, planning is not 100 percent under the government control. It depends on the investor. The private sector has some control. If the private sector can move and change it does not depend on the government 100 percent. So that’s why we are not 100 percent sure that government’s planning and city’s planning will 100 percent follow that they are planning.
Q: What more does the government need to do?
A: The government needs to protect from the bubble breaking. They have to control so the plan is clear. They have to control construction and the developments and developers…The government has to control that, to have clear plans, clear money…Do not just let one company come and they say they will build this and build this, when actually their financial background is not really good.
Q: So, the government needs to provide more oversight?
A: Yeah, so we need our country to have more control. It has to have something that is more secure to Cambodian people. People say, “Oh, I’m doing a development”… But nothing happens. Later on it’s just empty land for the next two or three years. It’s just empty land. They did not do anything. So they just speculated and this kind of thing is not good. [source: the Cambodia Daily on 20 March 2008]