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Widespread construction boom across Phnom Penh

120726_03

Following the boom in construction in Phnom Penh, real estate experts say over the next five years, the north and west of Phnom Penh will see the highest rates of building and construction.

Seung Bonna, director of Bonna Realty Group and the chairman of Cambodia Property Valuers Association, said that Cambodians place a higher value on satellite cities and township developments outside the city, for the future expansion of Phnom Penh.

He added, “We need satellite cities for future investment, and it is the right to expand the city,” saying that development will occur all around the city, but the greatest levels of construction over the next five or six years will be in the north and west of Phnom Penh.

He said, “Demand for houses is squeezing Phnom Penh, leading to the increase of residential construction on the outskirts.”

He said that the price of areas surrounding Phnom Penh is currently $50 to $150 per square metre, and that will increase by 30 per cent to 50 per cent in the next five years, with much residential construction and office space emerging there.

Cheng Kheng, the chairman of CPL Property, said that when a city is small, development will take place on the outskirts. He said, “the development is all around Phnom Penh, but the most important direction is the north and west, because there plenty of space there. In addition, there is Camko City, Grand Phnom Penh, many residential compounds, and no river.”

He added that the price of land along the important roads is $150 to $200 per square metre, and on smaller roads is $70 to $80 per square meter.

He continued, “In any country, there is demand for property, because of population growth, but it all depends on the economic conditions.” He added that the real property price may increase by 10 to 20 per cent in five more years, but if those locations [to the north and west] are good, and the price may increase two or three times.”

Cheng Kheng said the area located along National Road 4 is a target for construction investment for both local and overseas investors.

He added that in that area investment in factory and warehouse buildings is booming, in which rents, formerly only $1.3 to $1.5 per square meter before is now $1.70 to $2 per square metre.

He stressed “there is no any investment moving backward unless there is a national disaster or global financial crisis, which could make property prices decline.”

Doet Channa, director of Real Estate Company VMC, said that the investment will move to suburban areas as the city is getting more and more squeezed. The price of land in the city will increase significantly and it will see a lot of traffic congestion, so any expansion of residential areas must be in the suburbs.

He observed that a number of constructions of bank and high-end residential buildings are expanding their operations, while most investors are eyeing those areas. He added that along National Road 4 and 3, Phnom Penh Thmey and Chom Chao areas are well situated and not prone to flooding in the rainy season, so they are good for investment.

He added that the price of land in Phnom Penh Thmey along large roads is between $500 and $600 per square metre and along smaller roads is $150 to $250. The price in Chom Chao and Chamkar Daung along smaller roads is $30 to $50 per square metre and along National Road 3 and 4 the price of land is $10 to $15 per square metre.

He said he expects that in the next five years the price could be three to five times higher than now, and most of the investments will be residential, commercial, and factory buildings.

He added that the demand for houses and land in Phnom Penh doubled during the first six months of 2012, compared to the same period of 2011.

To contact the reporter on this story: Seun Son at son.seun@phnompenhpost.com

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