Real estate scene sees decades of ‘incredible’ gains

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In Preah Sihanouk province, 529 five storey-plus buildings have been completed, 278 (52.55 per cent) of which are reportedly in operation. Yousos Apdoulrashim

The Post has been on the forefront of covering stories from the world of Cambodian real estate and construction, sectors that have grown at a brisk pace of growth over the past two decades, especially in the capital and coastal Preah Sihanouk province, thanks to the rapidly-expanding economy and hard-won gains in political stability.

According to the Ministry of Land Management, Urban Planning and Construction, the government has authorised more than 57,000 construction projects nationwide in the last two decades, with total investment in excess of $66 billion. The real estate and construction sectors employ an average of 150,000 people on any given day.

The Phnom Penh Municipal Administration recently said that, in the capital as of the beginning of 2022, there were 310 landed residential projects – including gated communities known locally as “borey” – and 1,603 “high-rise buildings” – those at least five storeys tall – of which 225 are 20 storeys or higher, or 14 per cent.

In Preah Sihanouk, 529 five storey-plus buildings have been completed, 278 (52.55 per cent) of which are in operation, according to local reports.

Sam Soknoeun, president of Global Real Estate Association and CEO of KW Sam Sn Realty Co Ltd, described the pace of growth in the real estate and construction sectors over the past two decades as “unbelievable”, as property prices climb and hundreds of tall buildings and commercial complexes reshape the Kingdom’s urban centres into places that would have been virtually unrecognisable 20 years ago.

“When a country enjoys political stability, comprehensive peace, attractive investment laws, respect for the rule of law, and strong economic growth, the real estate and construction sectors will hands down run smoothly.

“The present contributions of local and foreign investors are providing really great impetus to the development of the Cambodian real estate and construction sectors,” he said.

Still, he noted, the earlier momentum behind the industry has cooled in the past two or three years, in a trend primarily tied to the exodus of Chinese expatriates as an online gambling ban took effect in 2020, the Covid-19 crisis, and most recently, the Russia-Ukraine conflict.

Meanwhile Huy Vanna, secretary-general of advisory firm Housing Development Association of Cambodia (HDAC), was similarly impressed with the “incredible” progress in the real estate and construction landscape, which for him is highlighted by the emergence of a host of shopping malls, commercial buildings, condominiums and borey.

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The government has authorised more than 57,000 construction projects nationwide in the last two decades. Heng Chivoan

He also underscored the fact that locals are behind a burgeoning share of capital investment, shifted away from foreigners.

“The factors building the strong muscle of the Cambodian real estate and construction sectors are political stability, robust economic growth, abundant labour and infrastructure improvements,” Vanna said.

Not confined to the capital and Preah Sihanouk, he pointed out that real estate and construction have also been gaining steam in up-and-coming provinces such as Kampot, Koh Kong, Battambang, Siem Reap and Kampong Cham.

Kim Kinkesa, senior manager of research and consulting at CBRE Cambodia, commented that although the sector had been growing faster than expected prior to Covid-19, the better part of the top-tier projects, worth hundreds of millions of dollars, were invested by foreign entities, either exclusively or in joint ventures with local partners.

Hence, the industry slowed to a crawl when Covid-19 struck, prompting countries around the world to impose travel restrictions, she said, predicting that it would take around three to five years for the sector to recover to its pre-2020 position, barring unforeseen pandemic aftereffects or other crises or challenges.

For now, there is no telling how the sector will progress in the next few years, especially as elevated oil prices linked to the Russia-Ukraine conflict send transport costs soaring, driving up costs of construction materials for ongoing developments.

Nonetheless, as land management minister Chea Sophara remarked in late May, the construction sector remains one of the four pillars that hold up the Cambodian economy, along with tourism, agriculture and industry.