September 27th, 2011
03:50 AM GMT
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(CNN) – You're starting your holiday and you get on a chartered plane that brings you to a private island. Then you check into your private villa with an endless view of the ocean. If you choose, your only visitor can be the gourmet chef who comes over to cook your meals every day. This is not the Seychelles. This is Cambodia.

That's the vision Rory and Melita Hunter have for anyone dreaming of the ultimate luxury experience. They plan to open Song Saa resort on December 31. It will be the first luxury resort on a private island in Cambodia.

The construction of 27 one- and two-bedroom villas are near completion. They will cost upwards of $2,000 per night.

"In many respects, it's an out of body experience," says Rory Hunter, referring to the ongoing construction. "You dream about something for a long time and you plan for it for such a long time."

The Hunters' story goes back six years.

Rory is a former advertising executive and Melita is a former set designer. Originally from Australia, they came to Phnom Penh and set up a business renovating old French colonial apartments and leasing them to expats. They never planned to become developers until they stumbled upon two small islands in southern Cambodia while on an excursion. The islands are called Song Saa which means "Sweethearts" in Khmer.

They bought the local land rights to the islands for $15,000 from two families living there. The Hunters knew they didn't really "own" the islands because in Cambodia, foreigners are not able to own land outright. They negotiated with the Cambodian government to lease the islands for 99 years.

The Hunters then started their plan of developing a high-end villa resort. They put in $370,000 of their own money as seed capital. They've since raised several rounds of financing from mainly European investors for this $21 million project.

The offer

In order to raise capital and lay the foundation for future revenue, the Hunters put the villas on the market. They are priced between $600,000 to $1.75 million. Owners are allowed to use the villa for one month every year and must make it available for rental the rest of the year. The owners are promised an 8% return of the purchase price for five years and then 50% of revenues after that.

They've pre-sold the majority of the villas to investors including Dare Koslow of Hong Kong. He saw a magazine ad for the villas and started to research the project. He acknowledges he's not the savviest of investors. "Whenever I invest in a financial instrument like stocks, I always lose, but with real estate, I'm quite successful. I liked the idea it was a tangible asset," Koslow says.

Risk factor

Cambodia is in the early stages of developing a legal framework for real estate and investment law.

"We are still an emerging economy," says Bretton Sciaroni, an American legal adviser and business consultant based in Phnom Penh. "We still have a long way to go. The Cambodian government is dedicated to building a modern economy with modern laws... but just getting laws down doesn't mean the laws are being implemented."

The government is pro-business. Foreigners can own 100% of their business in Cambodia and there are no capital controls on money coming into or leaving the country. The government has also recently passed a law allowing foreigners to own 100% of an apartment as long as it's above the ground floor.

The reality remains: there's a high level of risk for investors in any developing country.

"They're right to be concerned. In any property transaction anywhere in the world, due diligence is such an important component," says Rory Hunter. "The first thing we always say to potential investors is, 'Here's the documentation. Get your lawyers to review it independently.' "

Will wealthy guests come?

The big gamble is whether there is a customer base for a resort like Song Saa . Will the wealthy client want to come to a country where 28% of the population lives on a dollar a day. That's why tourism in Cambodia has been a budget traveler's dream. (A tourist can easily get by on less than $10 a day for meals and tuk tuk rides in Phnom Penh).

This is the gamble the Hunters are taking. They're making a bet - global downturn or not - that there will always be a segment of the wealthy who are rich enough and adventurous enough to spend $2,000 per night in an unproven country.

"Travelers who are looking for a sense of adventure and a story, Cambodia is a pretty great place to go," says Hunter.

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Filed under: Outlook Cambodia


soundoff (29 Responses)
  1. Voeun

    Why Hun Sen is nervous and looking for foreign investors? Hun Sen is running out of rivers and lakes to sell. See Beng Kok lake for an example. Hun Sen allows the Chinese developers to evict people from their properties in a broad daylight displacing thousands of people making them homeless. Hun Sen is nervous because if more and more people get poorer and poorer they will send him packing like Moamar Gadhafi. Cambodia is a sad place to live in. You must say something good to cajole and praise Hun Sen in order to live a reasonable life. Western reporters who say bad things about Hun Sen will be treated like criminals when they return. Remember Global Witness that monitored forests in Cambodia? They are bared from entering Cambodia because they criticized Hun Sen. No Westen businesses dare come to Cambodia because there is no law and order. If there is one, it is for Hun Sen and friends.

    September 27, 2011 at 5:22 am |
  2. david carden

    you need to do a little more homework on hotels in phnom penh, you mentioned one business hotel at 150 dollars per night, i assume you mean the Raffles Le Royal hotel, you missed the Intercontenental hotel at 180 to 200, and you missed the new Soffitel resort hotel at about 200, extremely nice 5 star hotels.

    September 27, 2011 at 5:44 am |
  3. Virak

    Country needs leader enable everyone a playground where you can live with your value, a common value of human being... and HS somehow does it eventhough corruption is now a "culture=norm+value" ;-) go kingdom of wonder!!!!

    September 27, 2011 at 7:47 am |
  4. erschrocken

    I would be more impressed if they were building a school or an orphanage – how many more luxury resorts do we need as we watch the rainforests burn, the wildlife destroyed and the poor suffering. Being wealthy used to carry with it the responsibility of helping those less fortunate and creating a society worth living in. Responsibility has left the building and soon we will be living in a polluted world where the rich live in gated communities (or resorts like this one) and the rest of the world in hovels.

    September 27, 2011 at 8:44 am |
  5. Chhy Somnady

    If you have $2,000 in hand, you need at least 1 month to spend and go around and see the real Cambodia Tourist place. Trust me!

    September 27, 2011 at 10:30 am |
  6. Qwerty

    T

    September 27, 2011 at 11:30 am |
  7. nwaigwe ikechukwu

    hi

    September 27, 2011 at 3:52 pm |
  8. nwaigwe ikechukwu

    how r u doing today

    September 27, 2011 at 3:54 pm |
  9. KhmerUS

    only $2000 per night? I would like to books it for 3 night for my song saa day Dec 24, 25 and 26 Thank You

    September 27, 2011 at 5:59 pm |
  10. Walter

    Why not? This is a private investment. Foreign investments coming to Cambodia will create jobs and attract talents. We need this kind of places to compete with our neighbors. Either build in Cambodia or Thailand or Vietnam...which one do you prefer?

    September 27, 2011 at 6:20 pm |
  11. Andy

    It's just so wrong in many ways: corruption, bribery to secure 99 years of land right? $2000. for a night For those who can afford the price, either they are drug dealers, bank robbers, corrupted officials or Hun Sen cronies. IT'S JUST SOOOO WRONG! I wish you well and unsuccessful in this venture.

    September 28, 2011 at 1:18 am |
  12. LIm Vannak

    I would like to wish Rory and Melita Hunter successful business in Cambodia. Your investment and your works contribute a lot to the development in Cambodia. I really appreciate your very creative ideas.

    September 28, 2011 at 1:29 am |
  13. ckk

    i love cambodia ,i want to go there .may be a day in the future!

    September 28, 2011 at 3:30 am |
  14. Otthoun

    You've to enjoy your life before WW3. Albert Einstein "I do not know what Weapons WW3 will be fought, but WW4 will be fought with Sticks and Stones." Make sure don't leave home without Chinese Cr.Card or American Express + 10% for me From Mr Roy and free room once a year.Khanti's Forbearance

    September 28, 2011 at 5:17 pm |
  15. mama

    i think this is ok for outsider people want to develop this place, because human like hun sen gange can't do anything to looking good excepted bag and corrupted if some one like those guy came and create this kind of heaven place like this it is ok better rent this iland to youn and chin the white people seem to have a bigger heart than asian chin. i have no problem with this but only problem i have is 99 years of renting but in hope of they hired a lot of khmer people working there. thank you any way

    September 29, 2011 at 12:18 am |
  16. peregrinamom

    Yikes! 2 grand a night for 1 or 2 bedroom villa? Eeck... looks dreamy but for half or less there are villa rentals many with pools all over the world (most fully staffed included in the price) with 4 or 5 bedrooms and one can go with the entire family.... it looks like it will be stunning but out of the reach of the majority of us out.....

    September 30, 2011 at 10:19 pm |
  17. Vyvy

    Aww....awsome!!! Cambodia heaven place king of wonder^^<3

    October 20, 2011 at 5:48 am |
  18. ddddddddddddddddd

    Truly corruption in Cambodia is sooooooooooo rampant. Let's us God to stop this through us–the people of Cambodia. Let us say no to corruption. Our people are suffering....Our children are the victims...........Let us do it in a peaceful way. Not the Arabs are doing...we do not have oil deposits here.....More than a dollar per liter.....

    Investments are good for a developing country....The people in the gov't benefits a lot as well! Alittle bit for the majority...

    October 23, 2011 at 9:35 am |
  19. daddyo

    A Cambodian family can live a year on 2000$. Stay home in your mansion and donate 2000$ to a useful Cambodian charity. The good feeling you get will last longer than the tan you get staying at this resort.

    November 5, 2011 at 3:25 am |
  20. Buun

    Wish you both lots of luck. Cambodia needs more investment as yours...building something beautiful.

    November 8, 2011 at 1:52 am |
  21. Will

    Cambodia is NOT the Maldives.....

    November 10, 2011 at 11:13 pm |
  22. (CHHEANG)

    CambOdia is a diveloping country .all investor please come to
    cambOdia .CambOdia is a wonderful place

    November 11, 2011 at 12:55 pm |
  23. Jbay

    You have to be kidding. Cambodia is not fit for dogs.
    The goverment change laws in minutes to suit them self's.
    The police? what police.
    The military is a joke.
    Many, many country's have tried to invest here, but always lose because of bribes and corruption.
    If you go there, make sure have protection, like korean body guards. The Cambodian body guards will run once you say BO.

    November 14, 2011 at 10:00 pm |
  24. timseang

    I love khmer
    we love cambodia

    November 15, 2011 at 3:47 pm |
  25. John Dory

    Actually, the Thai mafia has been very (very!) successful opening casinos along the Thai-Cambodia border. Wagers in Thai Baht or US Dollars or Brit Lbs or Euro Euros. Cambodians need not enter. Except as cooks and cleaning crew. A great place to launder your drug money!

    November 16, 2011 at 2:07 am |
  26. Jack

    Exclusive privacy in Cambodia ... pedo island?

    January 11, 2012 at 6:49 am |
  27. Sob

    It's good to hear about this investment and development. It gonna make more jobs for our Cambodian people and this investment can bring good image to our country. I wish this project going successfully!!!

    February 21, 2012 at 9:37 am |
  28. Soune Chbar Villa

    Good to see that Cambodia is on the tracks to inspire investors, there's a huge potential in this country. Here's another investment option, a unique luxury villa in Phom Penh by the Mekong river: http://www.villapp.com
    Good luck to the hunters!

    July 18, 2012 at 4:35 pm |

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