Cambodia Update November 2022
Greetings from New Nordic Cambodia,
We would like to take the opportunity to give you information on the latest updates about the Sunshine Hotel & Resort (“SHR”) project in Sihanoukville. Since the start of the pandemic, we have consistently pledged to do our best to protect the value of the building in Cambodia for the sake of our clients. Until now, the building remains in good condition with around-the-clock security, weatherproofing and engineering support as required. We would like to remind clients that the building is approximately 80% complete with finishings done on some floors.
As mentioned in our previous communications, certain realities of the current economic climate have had a direct impact on our ability to continue the project as originally planned. Specifically, increases in costs of materials have risen between 20-40% across nearly all line items. This, combined with our current market analysis of the tourism industry in Sihanoukville continue to suggest that a comprehensive restructuring of the project will be necessary in order to provide a sustainable return to investors. We have struggled to attract the interest of Western-oriented hotel operators to the project, but have continued to explore Asian-centric use-cases for the project, such as leasing all or part of the building to casino operators and converting some areas to commercial or entertainment-oriented space. These talks are ongoing and have the goal of providing additional revenue to the project beyond simply hotel operation.
Aside from the operational planning, our teams have been working toward a solution which would allow clients to sell their unit “as-is” without the need for further delay. We hope that such a proposal would allow for a substantial return of the purchase price, in addition to the cash back benefit that was paid until the start of the COVID-19 pandemic. Despite the difficulty in finding a sustainable operational plan, the Sihanoukville market has grown considerably and real estate values have risen sharply since the inception of the SHR project.
We remain committed to finding a positive outcome for our clients, which would include a long term management agreement with revenue sharing or the option to sell the units back as they are today. We would like to assure all of our clients that we continue to devote extensive time and resources to this effort. We look forward to sharing all the relevant details, along with our revised profit sharing proposal once ready. As always, we thank you for your support and patience. We welcome your questions and feedback at email@example.com and will continue to keep you informed as events progress.
New Nordic Cambodia
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