After spending the last three decades struggling to recover from the legacy of the Khmer Rouge’s genocidal rule, Cambodia now finds itself in the midst of a real estate boom. A decade ago the capital Phnom Penh didn’t even have one traffic light, now high-rise condos and offices are springing up as investors rake in the profits.

Many people still have an outdated perception of Cambodia, but private-equity investors – so often the bellwether for the hot investments of the future – are moving into the country at apace. At least four new private equity funds, backed by brand-name investors, are aiming to bring $475 million of foreign investment into Cambodia.

China, South Korea and Malaysia have also been pouring money into the country and in 2006 foreign direct investment totalled $2.6 billion, up from just £240 million in 2004. And according to Cambodia Investment, more than $6 billion may be invested in the country in the next three years.

The government will continue to encourage this investment with market-oriented reforms, and both the ruling Cambodian People’s Party and the main-opposition Sam Rainsy Party are committed to the same pro-business, pro-growth policy platform. Cambodia’s economy has been expanding rapidly as a result; by 9.6 percent in 2007, and by more than 10 percent per year during the previous three. Tourism arrivals have also grown, to 2 million in 2006, and by a further 20 percent in 2007.

Cambodians are getting richer too. And this increased wealth in the capital; the growing number of investors; and the increasing number of tourists are all helping to boost Phnom Penh’s real estate market.

Yet Phnom Penh is still at the beginning of a growth era, like Bangkok 20 years ago or Ho Chi Minh City 10 years ago. Property prices are cheap but they are moving fast – a traditional shop house along the river that sold in 2006 for $300,000 is now going for $600,000 to $700,000.

Cheaper property can still be found. Overseas specialists David Stanley Redfern Ltd are currently selling apartments in the chic riverside quarter of Phnom Penh from as little as £49,000. Their French colonial period apartments have been completely refurbished and modernised and are expected to appreciate by 15-20 percent per year. Due to demand, the developer is even offering a rental guarantee of 10 percent net for the first two years, making this a safe investment in an aggressively growing market.