$6 Billion in Building Projects

KHMER TIMES
SUM MANET

Investment in construction projects rose last year and early this year due to a construction boom. KT/Chor Sokunthea

During the past five years the government approved close to $6.83 billion worth of investments in 1,183 construction projects, according to a senior official from the Ministry of Land Management, Urban Planning and Construction.

“Building development in the country has moved rapidly over the past five years. According to ministry figures there are 741 buildings from five floors onwards, in Phnom Penh. This includes residential accommodation, condominium buildings, commercial and office buildings, and hotels,” said Lao Tip Seiha, deputy general director of the construction department in the Ministry Of Land Management, Urban Planning and Construction.

“As at June 30, the government has approved some $6.83 billion of capital investments in constructions with construction permits given out to approximately some 1,183 projects,” said Mr. Seiha.

Mr. Seiha added that investment in construction projects last year and early this year rose due to a boom in investment that included Aeon Mall 2 and other shopping malls, special economic zones and multi-storied commercial buildings.

“This year, 61 new buildings are under construction [in Phnom Penh]”, he said.

Investment in the construction sector reached an all-time high last year at almost $3.5 billion, up about 40 percent from the $2.5 billion invested in the sector in 2014, according to data from the ministry.

Em Chhun Lem, Minister of Land Management, Urban Planning and Construction, described 2014 as “the year of condominium and apartment development,” and said investment was flowing into construction from domestic and international sources.

The construction boom was the result of a combination of factors, including political stability, social security, and annual growth of about seven percent, he said.

Sear Chailin, CEO of CL Realty Co.,Ltd., is optimistic about the increase of investment in the construction sector, especially in high-rise buildings. “It is a good sign and augurs well for the country’s economy,” he told Khmer Times.

“As many high-rise buildings fill the Phnom Penh skyline, more and more foreign investment for future projects will flow in,” said Mr. Chailin.

“Right now, there is no problem with the demand for high-rise buildings and their rates of occupancy.”

Real estate has become one of the four pillars supporting the country’s growth and now accounts for more than 10 percent of gross domestic product, according to official figures.

As the construction industry becomes the most dynamic engine of economic growth in Cambodia, industry players are calling for enhanced legal protections as well as shifts in policy to protect vital investments in the sector. Also, civil society groups are urging the government to ensure that home ownership becomes a possibility for poor and middle-income families.