HLH fans out into property development in Cambodia

Group set to launch condo project as it builds up housing arm in newly emerging market

HLH's cassava operations in Cambodia. It entered the agricultural sector there in 2008, when key infrastructure was still lacking. PHOTO: HLH GROUP

Agriculture and property firm HLH Group plans to scale greater heights in Cambodia - its first residential project there is due to be launched later this month.

HLH has shifted its focus from Singapore to the newly emerging market but, so far, it has been involved only in agriculture there.

The development, to be named D'Seaview, is a mixed-use executive condominium with 1,000 homes, located on freehold land at the coastal town of Sihanoukville.

Construction is slated to begin by the year end and to be completed in slightly over two years.

Mainboard-listed HLH, which owns and runs about 10,000ha of cassava and sugarcane plantations in Cambodia, announced in June its foray into the property sector there.

Under Camhomes, its residential project brand, it plans to develop more than 3,000 prime apartment and executive condo units in Phnom Penh, Siem Reap and Sihanoukville over the next year. Camhomes is part of its property arm, Public Housing Development (Cambodia).

Chief executive Johnny Ong told The Straits Times in a recent interview that, as the company expands its business in Cambodia, it aims to do so with locals in mind.

"When we entered Cambodia in 2008, there were no roads, no water supply. Few locals had jobs," he recalled. "But now, it is opening up to investors, and lifestyles are improving. People have jobs, and their salaries are also going up."

He said: "Their next dream is to own a house. That's where we hope to play a role - by offering quality and affordable housing."

The lack of affordable housing in major cities remains an issue, he said. Demand could reach 1.1 million homes in the coming years - largely because of an influx of people from rural areas seeking jobs and education, he said.

"Local developers are doing landed property. Others from overseas, including Singapore, are doing luxury condos," he said, adding that such homes can cost US$70,000 (S$99,000) to US$1 million.

However, he said, they are looking for a different mix of buyers - "90 per cent foreigners, 10 per cent locals". In contrast, Camhomes hopes to bring in "90 per cent locals, 10 per cent foreigners". In particular, it wants to attract young couples and entrepreneurs.

Dr Ong said interested parties must apply for a unit at the Camhomes sales centre, where they must submit details about their financial profile. "We don't want them to over-commit to buy a unit."

He said HLH is in talks with banks and the Cambodian government to introduce supportive schemes for potential homebuyers.

Camhomes' project sales will be restricted to one unit per buyer. Those who choose to sell their units in the first two years will be required to pay transfer fees.

"We hope everybody will have a chance to own a home, but we don't want speculators," said Dr Ong.

In June, HLH put up for sale its last remaining asset in Singapore, D'Kranji Farm Resort, so it could focus on its operations in Cambodia.

The company posted a net profit of $890,000 last year, after two straight years of losses.

Dr Ong said he remains optimistic about prospects in Cambodia as the country continues to welcome investors and businesses.

As one of the last frontier markets in South-east Asia, it has been a hotbed of opportunity for Singapore real estate players in recent years.

The Asian Development Bank expects Cambodia's economic growth to reach 7.3 per cent this year, up from 7 per cent last year.

Dr Ong said many shareholders were concerned when HLH decided to invest in agriculture there, but the company was able to manage the risks.

"Today, our agriculture business has stabilised, and we can kick off the property business," he said.

"This country has a lot of potential to grow further, and we want to grow with it."

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A version of this article appeared in the print edition of The Straits Times on September 12, 2015, with the headline HLH fans out into property development in Cambodia. Subscribe