Booyoung Group, a South Korean conglomerate, has started ground breaking on the construction of a more than $1.1 billion new town in the heart of Phnom Penh. The industrial player said that it will be the largest construction project this year.
The huge amount of capital investment of the company will be used for building commercial buildings, residential buildings, a sports centre, and a school, according to Booyoung.
Booyoung said it will build 40 apartments and seven residential and commercial complexes on 2.7 square kilometres of land in downtown Phnom Penh, off Russian Boulevard. The planned buildings will accommodate 17,760 households in a landmark project, called Booyoung Town, the company said, but there is no deadline for the construction.
With the initial stage, the company will spend some $105 million to build the apartments and commercial buildings, which will have a total construction floor area of about 250,000 square metres.
Booyoung chairman Lee Joong-keun said at the ceremony that Booyoung Group is both big and very experienced in construction, both commercial and residential, in Korea, and he hopes to share this experience to Cambodia. “I hope that the Booyoung project will succeed and become a landmark in Phnom Penh.”
Im Chhun Lim, minister at the Ministry of Land Management and Urban Planning said that the company has rich experience in the construction business in Korea, especially apartment buildings, and it is one of the top ranking companies for residential developments.
“Now, the company has decided to invest in construction of a new town for commercial and residential buildings over a 23.5 hectares of land, located along Russian Boulevard, downtown Phnom Penh,” he said. “This is a significant contribution to boost economic growth and development in the construction sector, urbanisation and real-estate in Cambodia,” he said.
“This new town will be another groundbreaking achievement, alongside many other new and existing achievements, that will help to boost development in the residential, commercial and services sectors,” he said.
Noun Ritthy, general manager of the Bonna Realty Group said the project is the largest project coming from South Korea to Cambodia. “The company has made the right decision to start their project because they clearly understand the trends of the economy,” he said.
According to Ritthy, Cambodia had received many big Korean investors who are building including Posco, Hyundai, Camko, DeCastle and Gold Tower 42, which has been suspended, and Booyoung and GS, which has not started.
Between 2000 till the end of the first quarter of this year, there have been 100 companies owned by Korean investors which are registered with the Ministry of Land Management – of which 34 companies still hold valid licences, according to the ministry.
In 2012, Cambodia approved $2.1 billion of construction projects, compared to $1.2 billion in 2011, data from the ministry showed.
There are currently five satellite cities being built in Phnom Penh.
The World City invested $2 billion to develop Camco Satellite City, to be finished by 2018, Grand Phnom Penh, which is funded by Cambodia YNP and an Indonesian investor cost $600 million and is to be finished by 2018.
Diamond Island City, financed by OCIC is worth $300 million and is to be finished by 2016; Boeung Kak Lake Satellite City invested in by Shukaku Inc at a cost of $1.5 billion, and The Future of Dreams Satellite City, worth $1.6 billion, is to be finished by 2026.