Dreamland, the Kingdom’s biggest amusement park, has announced it will close at the end of the month when its five-year lease expires to make way for a colossal twin tower skyscraper set to rise in its place, a member of its management committee said yesterday.

“We are closing at the end of February because our contract is ending and will not be renewed,” he said on condition his name was not published. “I deeply regret that what we have built will be lost, but there is no choice but for us to shut down.”

The amusement park opened in 2011 on a 5-hectare lot opposite the NagaWorld casino in the capital’s Chaktomuk neighbourhood. KNN Cambodia Co Ltd said it sank $10 million into developing the theme park, which features a ferris wheel, water park, bumper cars and over a dozen rides.

But with its lease coming to an end, the property owner – Thai Boon Roong Co Ltd – has said the land will be used as the site of a 133-storey twin-towered commercial building, which if ever constructed would join the ranks of the world’s tallest manmade structures.

The company, which could not be reached for comment yesterday, claimed last week it received initial approval for the $1 billion project from City Hall.

According to the committee member, Dreamland employed 300 staff when it opened in 2011, but has gradually trimmed its workforce to 100.

He said initially up to 5,000 people visited the amusement park each day, and double that on holidays, but the number of visitors has declined in recent years as the operating company – wary of the lease expiring – reduced its investment in the park.

“We want to try another business venture, but we don’t want to invest in amusement parks anymore,” he said.

“We’ve lost on that business, so we will do something else.”

He added that the closure of Dreamland would be a loss not just for his company, but also for the city.

“I know that I lose in this business, but I do it for the beauty and prestige of the city, and not just for income,” he said.

Ung Kunvibol, head of operations at Dreamland, said the company will auction all of the park’s equipment and rides, and has already posted announcements for the sale. He said everything would be up for bid – from the giant ferris wheel down to the tables, chairs and air conditioner units – to recoup as much of the company’s investment as possible.

“We regret it. This place used to be where people came to have fun,” he lamented.

Kunvibol said the government should encourage investors to open another large amusement park for both children and adults.

City Hall spokesman Long Dimanche said there was no plan for a new amusement park yet, but the municipality would welcome any investor to develop one.

“It is good to have an amusement park [in the capital],” he said. “If there is a project, they can suggest it to city hall and we’ll cooperate.”

He confirmed that the five-hectare Dreamland site belongs to Thai Boon Roong Co Ltd, which has applied for a permit to build a twin tower as part of a mixed-use project. The proposal is still under review.

Real estate experts say ambitious development projects are often announced, with no intention of being completed, as a way of pushing up an area’s property prices. Developers are then able to sell the property at a high profit without ever sinking capital into developing it.

However, Seng Bunna, CEO of Bonna Realty Group, said while he has only seen the twin-tower project’s conceptual plan, even if the mixed-use building were erected on the Dreamland site, it would not significantly increase the land’s value.

He said in 2011, when the amusement park first opened, the price of land in the area was between $3,000 and $3,500 per square metre. Today it stands around $4,500 to $5,000. Any further hike would put it “out of balance” with the local property market.

“There are many places [around Phnom Penh] and a lot of space for such a project, so the land price cannot increase, or double or triple,” he said.

While Dreamland had its share of detractors – with one online review describing it as “Nightmare-land” on account of its poor maintenance and safety record – many Cambodian families have voiced regret over its imminent closure.

Dara Pech, who visited the park yesterday with her three children and elderly parents, said she had been unaware it would close at the end of the month.

She expressed dismay, explaining that apart from Dreamland and a handful of entertainment centres in shopping malls there were no other good places in Phnom Penh where children could enjoy their time.

“This is probably the last time that my family and I get to visit this park together,” Pech said before walking away.