Japanese real estate developer Creed Group will invest close to $248 million in three residential projects of over 2,000 units in Phnom Penh over the next three years, the firm announced in Phnom Penh last Thursday.
Located near Phnom Penh International Airport, Bodaiju Residences, a $134 million condominium project consisting of 928 units, will be the first project to get underway, according Punnareay Heng, business development manager at Creed. Construction is due to start later this month with a target completion date of December 2017.
“We think there is a high demand for Bodaiju because our condo isn’t located in the city centre,” Heng said. “We are located just outside the airport.”
Bodaiju will target foreign property buyers, namely factory owners and upper-level factory management, Heng said, particularly those manufacturers located at the Phnom Penh Special Economic Zone, which is also situated close to the airport.
Offering one-, two- and three-bedroom condos which, according to Heng, will be a fusion of both French and Japanese architecture, the average net selling price for Bodaiju will be $1,600 per square metre.
Heng said that the remaining two projects, Arata Garden Residences and Maha Sem Sok, will cost about $114 million and be located closer to the city, yet still on Phnom Penh’s outskirts.
These developments will be affordable housing projects aimed at Cambodian buyers across a range of incomes, Heng said, adding that further details will be available next month.
“The growth of Japanese private investors reflects the confidence in Cambodia’s open-economic policy, political stability and Cambodia’s long term economic growth, Im Chhun Lim, minister of land management, urban planning and construction, said in a statement following the company announcement on Thursday.
“[It reflects] the optimism that the economic relations in ASEAN will progress smoothly when the ASEAN economic integration happens at the end of this year,” he added.
The Creed announcement comes off the heels of rising concerns from the Ministry of Economy and Finance, who will hold a meeting this week to address issues about a potential property bubble in Cambodia’s real estate sector.
Sung Bonna, director of Bonna Reality Group, welcomed the addition of property developers to the market yesterday, but cautioned that real estate firms carefully assess the market to ensure that demand is readily available.
Real estate developers need to know the size and affordability of their local market, and assess whether or not they can attract overseas investors, he said.
“So if the developer can sell at least 50 per cent of its housing development costs to overseas investors, then I think they will have new demand, which means that it will be okay,” Bonna said.