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Logo of Phnom Penh Post newspaper Phnom Penh Post - Takeo’s Bati district could become a hotspot for garment factories

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A newly built garment factory in Takeo’s Bati district. Dit Sokthy

Takeo’s Bati district could become a hotspot for garment factories

Land prices in Krang Thnong commune, in Takeo’s Bati district near National Road 2, have recently multiplied by up to ten times compared to five years ago after two garment factories started being constructed in the rural community this year, locals claim.

Meanwhile, the area might be a hotspot for new garment factories, or factories looking to reduce costs and resettle in places that have an available workforce, real estate experts say.

“I have seen two garment factories under construction in my commune so far. When there were no garment factories, the land price was low. Obviously, it has sharply risen these days,” said Krang Thnong commune chief Yin Im.

“Some plots of land close to the National Road 2 could be sold at as low as $3 per square metre five years ago, while the price was as low as $1 per square metre for some plots of land located further along the National Road,” he said.

Sum Savy, 51, a local land dealer who helped to buy land from local villagers for the construction of garment factories, is well aware about the surge of land prices in the commune as well as that of land along the National Road 2. He said that now, land along National Road 2 is sold at about $30 per square metre.

“The land price is rapidly increasing due to the presence of garment factories along National Road 2, especially in Bati’s Krang Thnong district. As we can see, more factories have been built from the intersection of the National Road 2 in Kandal province,” Sum said.

While locals are saying that land prices are increasing, real estate agents claim that higher asking prices could detract from development along this stretch of road.

“Five years ago, the price for land located along National Road 2 was only $5 per square meter. The current price for [this] land is 30 percent higher than the rate of valuation given by official real estate agents. With low prices, there were a lot of sales but with the stalemate now, it is difficult to sell land there,” said Kim Heang, President of Cambodian Valuers and Estate Agents Association.

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Trucks loaded with supplies drive into new factories. Dit Sokthy

Nevertheless, he said that the increasing land prices cannot be linked merely to the presence of a few garment factories, but to other developments such as the planned improvement of National Road 2.

Additionally, Heang added that some factories could be considering relocating to this area due to lower comparative prices and less congestion. “So, these factors are interrelated.”

Whether surging land prices in Krang Thnong are dependent on factories resettling in this area for a comparative cost advantage, or new factories are being built, there is no data that can show that garment factories are moving away from Phnom Penh into the surrounding provinces.

“There are no statistics at all. I can assure you, no one in Cambodia would have the statistics of how many factories have shifted. As long as these factories exist, they are still considered a part of Cambodia’s factories and there is no point in tracking the number of factories moving to a new location,” said Ken Loo, secretary general of the Garment Manufacturers Association in Cambodia.

He added, in regards to the slew of factories seen along National Road 2, “they could be new factories setting up in those areas or they could also be factories that have moved out of Phnom Penh central itself, but these factories are still very much in and around Phnom Penh.”

Whether they are new or old, according to local land dealer Sum, Taiwanese investors have tested the waters by approaching potential workers in the Bati district before undergoing construction.

“There are almost 1,000 villagers from the commune working in garment factories located in the Kandal Stung district. [For the time being] they travel in the morning to their workplace and return in the evening,” said Yim. ​

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