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Construction up 24%, but not growing as fast

Agents are still optimistic that construction approvals will pick up in the last part of the year.
Agents are still optimistic that construction approvals will pick up in the last part of the year.

Construction up 24%, but not growing as fast

Investment capital in the construction sector in the first nine months of the year increased 24 per cent, according to recent data from the Ministry of Land Management, Urban Planning & Construction.

From January to September 2013, the ministry issued permission letters on building constructions totally 1242 projects, which had a total of six million square metres at a cost $2.27 billion.

That compares to the same period in 2012, which had 1357 projects, totalling 5.6 million square metres and costing $1.835 billion.

Lao Tip Seiha, deputy general director of the ministry’s construction department, said that the construction sector played a vital part in boosting the national economy because its growth created a lot of jobs for people.

Although the growth of the sector in the nine months of 2013 is smaller than in 2012, Tip Seiha is optimistic that at the end of 2013 it will continue increasing because local and international investors have asked for more permissions for building construction from the Ministry Of Land Management, Urban Planning & Construction than during last October.

He added that the projects proposed for building within this nine-month period included residential buildings, villas, flats, a supermarket, a casino, commercial buildings, acadamic buildings, a hospital, bank, hotel, garment warehouse, and a petrol station.

However, the growth rate is not at as big a scale compared to 2012. Construction investment in the first nine months of last year climbed from 2011’s $999 million to $1835 million, equating to a huge 83.6 per cent increase.

Many real estate experts have confirmed that the second quarter of 2013 would see many foreign and local companies investing in most property sectors in Cambodia. And many believed investment slumped in the third quarter this year due to the political tension after the election.

Seng Bunna, a director of Bunna Realty Group, said that, after the election, the situation for real estate in Cambodia was like a coffee break, but that investors would begin to come back in, especially with the country preparing for the Asean economic community integration.

That made it a good time to invest, he said.

“Initiating an investment in Cambodia at this time is very good, for by 2015 there will be a lot of foreigners coming here,” he said.

“The real estate sector, especially office space, condos and apartments, will be in great demand by 2015,” he said.

This year there have been two big foreign investment projects, those of Booyoung from South Korea and Hong Kong Land company.