From January until November of this year, investment in the construction sector mounted to $2.96 billion, marking a 27 per cent increase compared to the same time span in 2014, according to new data released by the Ministry of Land Management, Urban Planning and Construction (MLMUPC).
Im Chhun Lim, senior MLMUPC minister announced the new figures at the annual construction fair that was organized by Cambodia Constructors Association (CCA) last week. According to Lim, of that total amount, $1.5 billion, or around 54 per cent, is invested in buildings ranging from 10 to 55 storeys. On that note, the investment prompted the minister to call 2015 “The year of condo and apartment construction.”
Pung Kheav Se, head of CCA stressed that the exhibition was “to show the development and improvement of the construction sector in Cambodia, as a result, there are multi-storey buildings [and] modern structures roaming up the capital city of Phnom Penh, which is stunning.”
He added that the fair was essential to present the supporting activities of the association as well as the government’s plans for the construction sector.
Not addressing any government plans for the next year however, Im Chun Lim dwelled on “political stability, the social security and the economic policy of a free market and the good investment conditions the government created in previous years,” which has made Cambodia’s economic growth of 7 per cent per annum possible, with the construction sector contributing the biggest growth figure of two per cent.
Unmentioned however, was the warning issued by the World Bank this October that pointed out the threat of an overreliance on the construction sector as its growth outpaced traditional industries like agriculture and garments.
Nor was there mention that Cambodia ranked among the lowest in the World Bank’s latest Ease of Doing Business report. The report specifically singled out Cambodia as the ASEAN member state where getting a construction permit and registering property was the hardest in the world, ranking 181 and 121 respectively.
Supporting the notion that Cambodia’s construction surge came from circumstances, rather than effective policy making, Sung Bonna, director of Bonna Realty Group, said that the recent growth of real estate investment over the last year, happened due to the oversupply of real estate in China, Hong Kong and Singapore, thus resulting in the relocation of investors who see Cambodia as a new market that can draw substantial profits.
“As our country is small, when the investors flock in, we feel it is a lot, while in fact some of the investors also spread to other countries like Vietnam and Myanmar,” he said.