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The House Price Boom Heads East

Until war and the Communist revolution ravaged Cambodia, Phnom Penh, the country's capital, was known as the 'Pearl of the East'. The city's landscape was an exotic blend of French Art-Deco colonial architecture and more traditional Khmer and Chinese styles. But during more than 30 years of upheaval, many historic buildings were destroyed or damaged

In recent years, Cambodia's capital has undergone a building-boom that has changed the face of the city. New developments are springing up everywhere, ranging from multi-story apartment blocks to brand new satellite cities.

Today a threat to Phnom Penh's remaining historic buildings comes from local property developers who tear them down to make way for new developments. Tour guide Yam Sokly knows Phnom Penh's historic architecture - saying rich property developers often tear down old buildings to make way for new developments.

Yam Sokly: "Many of these old buildings have eight or ten poor families leaving here and if you want to renovate this building it is very difficult to pay off them to leave. And the people who can afford is rich property developers who may have the idea to pull down the building and to make a new property development."

Despite the loss of many historic buildings, much evidence of Phnom Penh's 'golden era' remains. And a growing demand for housing has seen renewed interest in renovating these old buildings and converting them into high-quality homes.

Most are bought by foreign investors who rent them out to earn additional income. Australian Rory Hunter is the CEO of Brocon Group, a Phnom Penh based property developer that specialises in renovating French colonial-era properties - he says there's a considerable amount of money to be made in the Cambodian market.

Rory Hunter: "All the investors that we're seeing in the French colonial-era apartments and buildings are very much foreign investors. And the reason that they're looking at Cambodia is the yields are great - on all of our properties we guarantee a yield of 9% for the first 2 years. And because the economy is growing so rapidly, the capital growth upside is very large as well."

Developers like Brocon try to maintain the essence of the original buildings while fully refitting them in a comfortable, more modern style. Melita Hunter, Brocon's chief interior designer, says there's an obligation to restore the historic buildings.

Melita Hunger: "We feel we have an obligation to find the beauty in these old apartments and to restore them - not tear them down, so we're very very very conscience of everything."

Attention to every detail adds a level of comfort that is hard to find elsewhere in Phnom Penh. Christophe Forsinetti, who's from France, recently bought this renovated colonial-era property in the heart of Phnom Penh.

Christopher Forsinetti: "So we bought this apartment only 5 months ago for $100,000. We really believe that is was a good asset because the market is increasing and we're so happy to live in such a standard that we could not probably afford in Europe."

He says the move has given him a higher standard of living than he could have found in Europe. With a booming economy, the demand for high quality renovated old properties in Phnom Penh continues to grow. It seems the future of many of the city's beautiful old building now looks secure.

Information for this report was provided by APTN.