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Approved construction investments up 30 per cent in 2015

Content image - Phnom Penh Post
Though the number of construction projects has increased by almost a third over the last year, experts are skeptical if investments will follow. Pha Lina

Approved construction investments up 30 per cent in 2015

Investment in the construction industry in 2015 amounted to $3.3 billion – a 33.14 per cent increase from the same period in 2014, which was only $2.5 billion.

Seng Lot, spokesperson for the Ministry of Land Management, Urban Planning and Construction (MLMUPC) said on Tuesday that there were over 2,305 approved projects in 2015 measuring up to a total of 7.7 million square metres and 13,423 units.

There are about 700 buildings of between five to 55 storeys, which are currently being constructed or are pending construction.

He continued, “the rapid growth in investment in 2015 is the result of economic growth which Cambodia has achieved over 7 per cent in recent years, and we expect it to continue rising in the next few years.”

“Investors have confidence in the political and social stability of the country, especially since the Royal Government is focusing more on the construction industry as well,” Lot added.

While local investors make up the majority of massive real estate investments, Chinese investors rank number one from the foreign investment sector.

“For 2016, the Ministry is optimistic that investment in the construction industry will continue rising, even higher than in 2015,” he said, adding in fact, three or four investment projects submitted to the Ministry are all big projects valued at hundreds of millions of dollars.

Lot also said that the MLMUPC is working hard to make the registration process and many other construction regulations as efficient as possible, in response to the rapid increase in investment in the construction and real estate industries in Cambodia.

Chrek Soknim, CEO of Century 21 Mekong, said that the rapid growth in the construction and real estate industries in 2015 was due to substantial funding support from banks.

Moreover, investors continue to turn to Cambodia because they have an eye for the lucrative ASEAN market, especially so with the fact that the real estate industry here has tremendous room to grow.

However, Soknim is not too optimistic for 2016’s forecast, as he said that investment in the construction industry may be slowly reclining due to the recent interest rate hike in the United States’ Federal Reserve, as well as the economic confusion in China.
Sung Bonna, CEO of Bonna Real Estate Group, also does not have a positive outlook on this year’s investment climate.

Subsequently in 2015, the amount of land for development was roughly the same, but there were more funds pumped in, although it remains unclear where the money had originated from, he stated.

He compared the transparency and the amount of investment to be akin to human flesh.

“We don’t know its form because we can only see its outer side. However, we would celebrate if it really flows into Cambodia,” he said.

Bonna concluded that what would undoubtedly benefit the local citizens would be the transparency of where investment funds come from, so that the industry could continue to flourish.

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