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Lower land rents to restore stagnant Preah Sihanouk property

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Buildings under construction in Preah Sihanouk province in 2021. Hong Menea

Lower land rents to restore stagnant Preah Sihanouk property

Preah Sihanouk provincial authorities have urged construction owners and landlords to come to a consensus to lower land rental prices to restore the stagnant real estate sector and clean up the image of the coastal province as the economy recovers.

Preah Sihanouk Chamber of Commerce held a consultative meeting on real estate rehabilitation mechanisms and solutions on more than 1,000 abandoned buildings in the southwestern province.

The meeting on July 3 saw the participation of provincial authorities and administration officials, land and construction owners where important inputs were gathered for submission to the government, and representatives of the private sector and Ministry of Economy and Finance to draw up solutions.

Preah Sihanouk provincial deputy governor Long Dimanche told The Post that there are no results from the talks yet.

The aim is for stakeholders to make concessions and work together to resolve issues and avoid any impact as a result of the abandoned buildings.

Dimanche said incomplete buildings have seriously affected the image of Preah Sihanouk as a whole, while weak construction techniques have eventually led to accidents, and severely undermined the socio-economic conditions of Cambodia.

“On behalf of the authorities, we have tried to explain to the private sector regarding the current situation of land prices, which is not the same as it had been in 2017 or 2018.

“We want them to have an out-of-court settlement or resolution so that the authorities can continue to see how they can help,” he said.

Dimanche pointed out that the explanation by real estate experts, economists and the authorities, landowners and buildings owners have been taken into consideration, but without any specific response yet.

“We will continue to look for a solution as well as possibilities that can help the mediation stage. We need to find sources of income from new investors to collect all these assets to add value.

“Preah Sihanouk will be a multi-purpose special economic zone, so not only Chinese investors, we welcome investors from all over the world who want to invest in Preah Sihanouk,” he said.

Preah Sihanouk Chamber of Commerce president Vann Sokheng told The Post that his institution is an arbitrator between landowners and building owners that is working to facilitate an agreement among the involved parties to resume construction of these buildings, many of which have been stalled for more than two years during Covid-19.

“Our private sector has been able to help them [landowners and building owners] negotiate prices for the land, which had been agreed at an acceptable price for the buildings that have already been partly built.

“[It’s] so that they can complete the construction and operation to avoid more damage to the building,” he said.

Regarding price negotiations that have yet to be resolved, the chamber of commerce plans to continue attracting investors as the economy recovers, particularly by luring Chinese investors to re-invest in Cambodia.

Ann Sothida, general manager of PropNex (Cambodia) Co Ltd, a local affiliate of Singapore’s PropNex Ltd, said her business would facilitate sales operations by finding investors to buy the unfinished buildings.

“We have to work together to speed up this work. We have facilitated real estate prices because the current real estate prices in Preah Sihanouk are not the same as before. In addition, we do not want them to depend on Chinese investors and we want Preah Sihanouk to be a province with multi-ethnic investors,” she said.

According to a report by Preah Sihanouk Provincial Administration, from 2017 to November 2021, the province featured 1,661 construction projects with a total capital investment of over $8.4 billion. Of those, 620 projects are between five and 53 storeys tall.

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