Although the Chamkarmon district is seeing a continuous rise of land prices year after year, the lack of infrastructure capacity will eventually create a hindrance for development growth.
According to a report from the VTRUST Journal of Real Estate released on October 26, in correlation with new development projects, the capital’s land prices have risen by 10 per cent year after year, primarily in the Chamkarmon district where sub streets cost about $2,000 to $3,500 per square metre and major streets cost about $4,000 to $6,000 per square metre.
With property demand surging within the Chamkarmon district, specifically within Boeng Keng Kang, Tuol Tumpung, Tuol Svay Prey and Oulampik in the first half of 2015, 20 new developments worth $3.2 billion were approved by the ministry to start construction within the Chamkarmon district and are estimated to reach a value of $3.6 billion this year. From 2011 to 2014, developments were valued up to $2.2 billion each year.
However, Hoem Seiha, the director of research for VTrust Appraisal Co., Ltd., said that eventually the lack of infrastructure capacity will cause land prices to stabilize in the long run.
“With the rapid increase of population, 20 per cent car ownership per household in the city and the ever-increasing rate of the white collar class who commute from different areas to downtown Phnom Penh, the lack of adequate parking solutions will be the daunting challenge for business communities in the central business districts,” he said.
Consequently, the developing outskirts of Phnom Penh will cause future competition with the Chamkarmon district.
“There will be a shifting trend to the fringes or satellites of the city, as of today [we are] already witnesses to the urban sprawling at different outskirts of the capital,” Hoem said.
As “suburbs” in Phnom Penh develop strong infrastructure plans, such as Aeon Mall 2, Chip Mong Land and New World Sen Sok in Phnom Penh Thmey, Camko City in Russey Keo and Grand Phnom Penh in Chrang Chamreh, the limitation of new development space in the Chamkarmon district “will decrease the concentration of the Chamkarmon district.”
“Some per cent of people will flock to the mention of a satellite city and create new businesses there to avoid traffic jams and the lack of adequate parking space here in the central business centers,” he said.