The amount of companies granted construction permits from the government are slowly decreased in 2015 compared to previous years while the government attempts to reform construction laws and regulations.
Last week, Huy Nara, gerneral director of the ministry’s construction department within the Ministry of Land Management, Urban Planning and Construction said during the first six months of this year, there were 915 construction projects granted permits worth a total investment of $808 million.
So far, 1,581 companies have requested permits from the ministry. Out of the 915 that have been granted thus far, 646 went to local developers, while 202 went to foreign companies.
According to the Ministry of Land Management, Urban Planning and Construction survey in 2013, 1,641 projects were given permits, worth $2.7 billion in investment, a 31.45 per cent increase compared to 2012. In 2014, 1,960 were granted permits worth about $2.5 billion, a subtle decerase of 0.09 per cent.
In addition, the Ministry of Land Management, Urban Planning and Construction are undertaking reforms to strengthen construction laws and regulations in response to continued investment. The private sector has partnered with the government during this process.
Earlier this week, the European Chamber of Commerce signed an agreement with the Ministry of Land Management, Urban Planning and Construction to help strengthen standards that would further encourage overseas investment in Cambodia’s property sector.
Minister of Ministry of Land Management Urban Planning and Construction Im Chhun Lim said that the construction sector in Cambodia will increase due to the collaboration.
Meanwhile, without an accurate figure, Seong Bunna, director of Bunna Reality Group, said it was too early to tell if investment in construction would decrease compared to previous years despite the slowdown in permit applications.
He said that many of the current permits are granted for sizeable development projects. With the high level of investment over the last couple years, he said that the correlation between permit applications and total investment is an unclear indicator overall development.
“Cambodia is like a small lake that attracts many fisherman,” he said. “It is time to sit and see who runs away to find a new lake.”
Currently, while permit applications seems to have quieted as most developers are aiming to finish projects already under way, it is hard to predict what the total investment in 2015 will amount to, explained Bunna.
“One of the main factors of uncertainty is how the ASEAN Integration will impact the flow of investment,” he said.