Chean Chhoeng Thai Group Co Ltd, a sister firm to China’s Yuetai Group has announced a more than $500 million investment to develop a parcel of land along Phnom Penh’s riverside, indicates approval documents from the Council for the Development of Cambodia (CDC).
Acquired through a 50-year lease agreement earlier this year from Phnom Penh Autonomous Port (PPAP), the 9.25 hectares along the Tonle Sap river went for a fee of just $16.5 million .
Yuetai Group is a Chinese developer that operates various property projects in Cambodia such as East One and East View. It plans to build a strip of luxury condominiums and office towers on the land.
According to a press release, the CDC has approved some $531 million in investments in the project, which is said to create 21,684 jobs.
The investment approval comes after the lease agreement was signed on July 19, handing over the strip of land that stretches from the Chroy Changvar bridge to the capital’s Night Market.
The CDC’s approval came after PPAP signed an agreement on July 19 to lease the land from Chroy Changvar Bridge to the Night Market to Chean Chhoeng Thai Group, after it was reclassified by the government.
In March, the land had been reclassified from “state-public” to “state-private” in a sub-decree signed by Prime Minister Hun Sen.
$1 billion commercial centre
“An investment of over $500 million [seems right] because it’s a big project and is in a good location,” he said.
Channa said the land could be leased privately for between $5,000 and $6,000 per square metre.
Yuetai is a major real estate development group in China. It was established in 1979 and began investing in the Kingdom in 2011.
PPAP additionally signed a lease agreement with another Chinese company, Yunnan Shengmao Investment, for over 10 hectares in the capital’s Russey Keo district.
The firm plans to build a $1 billion commercial centre during its 40-year tenancy. The rental fee for this deal, however, was not disclosed.
A senior adviser at Emerging Markets Consulting, Nget Chou, said projects with capital investments of more than $500 million have the potential to provide a lot of economic benefits to Cambodia, such as creating jobs and revenues from leasing.