The development of former Boeung Kak Lake in central Phnom Penh has been one of the most controversial and, at the same time, one of the most ambitious real estate development projects in recent Cambodian history. And now a new chapter in the development of the area is about to begin.
From private development firm Shukaku Inc.’s point of view, the developer that obtained a freehold for the development of the land in 2008, beginning the development of the land could probably not have been more difficult.
With the drying up and filling up of the lake with sand in 2008, frenzied media reports of land rights issues of up to 20,000 evicted lake residents and their unfair compensation – if at all – by authorities immediately overshadowed the questions of what would be developed on the land.
To make matters worse, serious flooding issues occurred after the drying up of the lake, causing an imbalance in Phnom Penh’s aquatic cycle in the monsoon season.
Though flooding and the compensation of evicted residents still remain major problems that the municipalities need to solve, Shukaku’s image as a developer suffered in public opinion to an extent that an imminent question is still unanswered: what will be developed on the 111.6 hectares of newly created, undeveloped prime real estate in the heart of the Cambodian capital?
Speaking to Post Property in her first media interview, managing director of Shukaku, Michelle Lau, admitted that the relocation of the lake’s residents could have been handled better and that flooding issues still persist – though she prefers to talk about the future because Shukaku has completely overhauled their approach towards the development of the former Boeung Kak Lake, which Shukaku now calls Phnom Penh City Centre (PPCC).
The young Cambodian woman of only 26 years is the daughter of Senator and CPP member Lao Meng Khin. She has been managing the affairs of Shukaku since 2012. She owns and operates various business ventures in Cambodia and holds a Bachelor’s degree in commerce from the University of Melbourne in Australia.
Her task to make Boeung Kak Lake a commercial success, against the rocky start and unfavourable public relations, seems like a mammoth one.
Amid the enormity of the development task, Post Property met Lau as a quiet woman dressed casually. Yet, she spoke clearly, determined and enthusiastic about PPCC’s potential success.
Developments for the new master plan of PPCC began in 2012 – the year Lau took over the reins at Shukaku.
Focusing on the large 111.6-hectare plot of land, it seems that Shukaku has succeeded in developing and delivering one of the most transparent and detailed development master plans published in Cambodia so far.
Property developments confirmed by Shukaku
PPCC Sports Complex
“This is built with the community in mind. It’s a complex that houses two football fields, a badminton court, a volleyball court and a café.”
Closely located to PPCC Sports Complex, Central Park is supposed to become an area “where the public can enjoy space and greenery – something that isn’t so widely available in Phnom Penh right now.”
This is Shukaku’s first residential villa property “tailored for the modern urban lifestyle which has already received interest from Cambodian customers”.
“The project is co-developed with our partner, GRED, and is an integrated lifestyle, residential and commercial hub already well under way.“
A further development will be announced tomorrow.
Projects recently confirmed by other developers
This mixed development is a joint venture between Meridian Holdings and Shukaku. According to Meridian developer Salomon Wolf, Meridian Square will consist of four twin towers with 32 stories each. Construction will begin in August this year and the first tower is scheduled to complete in 2020.
The new master plan divides the whole land into more than 40 different plots with fixed and specific development purposes which, in essence, create “an integrated and liveable city, with carefully thought out urban planning of an international standard, guided by structured development codes,” said Lau.
Of course, a vast area such as PPCC cannot be developed by a single developer alone.
Rather than trying to enter large-scale joint ventures, as has already been tried and failed in one case in 2014, when Chinese company Erdos Hongjun Investment Corporation aimed to develop almost 50 per cent of the land in a joint venture, Shukaku has now changed their strategy in finding joint venture partners.
“Because we have already put in place urban planning controls in our plan and the entire system, we are actually looking for small to medium sized enterprises as development partners,” Lau said.
While some of the land will be, or has already been, sold to other unknown developers, Shukaku will remain involved in the massive project for a vast majority of the land.
“We’re looking for companies that understand what we’re doing. Because you need to understand that we’re not just building isolated developments [like] in Boeung Keng Kang or Toul Kork; we want to build an entire city,” Lau said.
Unlike Phnom Penh, PPCC aims to organise different developments into centralised groups, in accordance with their purpose. In Shukaku’s ‘city within the city’, residential, commercial and mixed development are confined to specific areas.
The benefit of strictly regulating where developments are or are not allowed to take place, according to Lau, is having a “central place for businesses to conduct efficient, comfortable and reliable operations. PPCC will definitely be the capital’s new business and financial district.”
She added, “But it will also be more than that. My vision is to create a place where the community can truly live in the future of Cambodia – this includes wide spaces filled with greenery and safe roads as well as providing a central place for businesses to conduct efficient, comfortable and reliable operations. PPCC will essentially be the capital of Phnom Penh.”
To date, Shukaku has revealed four developments projects within PPCC and is expected to announce another one on Friday.
Yesterday, Salomon Wolf, co-owner of German-Hong Kong property developer Meridian Holdings also revealed his company’s newest development in PPCC, a $400 million mixed-use development called Meridian Square, in partnership with Shukaku. It can be expected that more announcements of similar joint ventures will keep on being announced over the coming months.
With a development timeline scheduled to be finished by 2025, PPCC can expect up to 200,000 visitors per day upon completion and will be home to 56,000 residents, according to the developer.