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Lessons for real estate sector from floods

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In southern Phnom Penh, 11 of Dangkor district’s communes were submerged in water, district official Sim Tola reported. Hong Menea

Lessons for real estate sector from floods

The recent deadly floods that have swept across broad swathes of the Kingdom have left in their wake a panorama of inundated streets, homes, warehouses and factories in Phnom Penh’s southern Dangkor district, and sobering lessons for the real estate sector.

First and foremost, developers and customers must think twice before investing in property, and in full consideration of its geographical location, according to Emerging Markets Consulting (EMC) senior consultant Ngeth Chou.

Adding fuel to the fire, the Prek Thnot River dam collapse on October 14 in the southern end of the district flooded thousands of homes and cut off stretches of roads from traffic.

The following day, Phnom Penh municipal governor Khuong Sreng decided to temporarily block Chamkar Doung Street (Street 217) to the Kuor Srov Roundabout and several other roads in the district.

Sim Tola, the head of Dangkor district administration, told The Post that day that 11 of the district’s communes were submerged in water.

EMC’s Chou told The Post on Wednesday that southern Phnom Penh is still awash with Prek Thnot River flood water.

He pointed out that the river flows from the Cardamom Mountains in Kampong Speu province and that rains there lead to floods along the river course.

“Land from the Kuor Srov area down to Kandal Stung [district in Kandal province] has low elevation. This, in conjunction with its proximity to the waterway [Prek Thnot River] makes it vulnerable [to flooding].

“The area usually gets flooded once every four to five years. Given that, the construction of boreys [gated-communities], factories or warehouses there could be adversely affected.

“Prevention will be a difficult matter. We need large reservoirs, and strong and expansive irrigation systems, which will require the state to invest a lot.

“It is paramount that developers thoroughly assess the geographical situation of potential project sites and note whether they are vulnerable to flooding.

“Even if the developer doesn’t take that into account, customers must be savvy and weigh all factors associated with [their potential purchases] and be privy to which areas are flood-prone.

“Whether they pursue [the deal] or not, developers are sure to respond to market demand,” Chou said.

CPL Cambodia Properties Ltd chairman and CEO Cheng Kheng said project developers, potential buyers and provincial and district authorities should meet and discuss in full detail before major investments and be better equipped to manage unforeseen risks.

He said: “Floods only happen once in a while, but after this incident, I think the government and the developers operating in the area should meet and find solutions to avoid any risks that may arise down the line.

“District and provincial [authorities] are typically eager to woo investors into their jurisdictions. Only through collective brainstorming sessions with the provincial and district governors and all the developers involved can we steer clear of these complications.

“The flash floods have provided a valuable lesson for all of us. Potential buyers and borey developers particularly will think carefully after this experience.

“I believe both developers and potential buyers will be wiser after the recent natural disaster, and if they don’t find a proper solution [following meetings with] provincial or district [authorities], they will not want to invest and take the risk.”

The Ministry of Labour and Vocational Training reported on Sunday that at least 79 factories had been affected by the floods. Of these, about 40 temporarily suspended their operations, affecting more than 40,000 workers.

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