Phnom Penh, which currently has six satellite cities under development, may be jumping the gun in terms of the demand for them, according to a new report from global real estate firm CBRE. 

In its latest MarketView report, CBRE says bluntly that currently “demand for satellite cities is low. Phnom Penh’s population is currently not willing to relocate to these developments often due to the lack of amenities and facilities.” 

Satellite cities are defined as a metropolitan area located in the vicinity of a large urban area, but which remains independent. Six satellite cities have been approved by the government, including Diamond Island satellite city in Tonle Bassac commune, Grand Phnom Penh International in Sensok, Camko City near Sensok, Boeung Kak Lake in Daun Penh, a future satellite city in Russey Keo district’s Chroy Chongva commune, and Ly Yong Phat’s satellite city along National Road 6. 

The CBRE report says that due to its proximity to the city Diamond Island “has been extremely successful. Good infrastructure linking the development to the city has created a popular destination among Phnom Penh residents. This has led to increased take-up of residential units and commercial space within the project.”

The report goes on to say that Camko City also saw high demand in the initial launch “although an over-supply of condominiums in line with the global financial crises led to a rapid decline. This along with legal complications led to the project being stalled.”

Tous Saphoeun, dean of the Architecture and Urban Planning Faculty of Mathematics, Sciences and Engineering of Pannasastra University of Cambodia, recently told Post Property that he thought the development of three of the huge projects is progressing well.

“First, Koh Pich (Diamond Island) is conclusively progressing and then Grand Phnom International is gradually finishing its own project. Finally, Camko City has been regularly and daily developed,” he said. 

However he went on: “Only Koh Pich is being marketed well among all the projects because it is the first development of an entertainment centre,” he said. 

CBRE says the challenges surrounding satellite cities are largely about matching the demand to the large supply being launched onto the market.

Phnom Penh currently has a land area of 678 square kilometres. The current supply of satellite cities accounts for 79 square kilometres, or an additional 12 per cent of urban land around Phnom Penh.

The report is optimistic in the long run however. “The satellite cities in Phnom Penh are all relatively new and at this time they all have the opportunity to become success stories. This can only be done with good planning, market knowledge and first-rate marketing.” 

David George, country manager for CBRE said: “Throughout South East Asia there are a number of cases where satellite cities have been successful: these include Muang Thong Thani in Bangkok, Saigon South in Ho Chi Minh and the Fort at Bonifacio in Manila. It has also been the case that these cities take time to develop; after a number of years they are now being seen as success stories.”

To contact the reporter on this story: Rupert Winchester at [email protected]