The Ministry of Land Management, Urban Planning and Construction (MLMUPC) will again hold a meeting with Yon Woo Cambodia Co. Ltd., the Korean developer of Gold Tower 42, to request details on the proposed construction re-start date.
Earlier this week, Huy Nara, general director of MLMUPC’s construction department said, “The ministry once had a conference with Gold Tower 42’s developer, and he promised the construction would be restarted in February [2016]; however, it hasn’t even begun yet.”
He continued that the ministry plans to analyse the reasons as to why construction has been repeatedly put on hold, and will thoroughly scrutinize for signs of bankruptcy. “They can’t just give their word without committing to it.”
“As authorities, we are bound to have practical measures,” Nara said, adding that those enterprises’ investment should be transferred to other companies if they are unable to contribute further investment to the construction.
When asked about established procedures and meeting schedules, Nara did not go into details, referring Post Property to Pheung Sophorn, state secretary of the MLMUPC, who has mainly been shouldering the responsibility of this matter.
However, Sophorn claimed he was not clear when the project would begin again. When pressed for more details, he said, “Please ask the administration who knows more about this work.”
The Gold Tower 42 project was tipped to be Cambodia’s tallest building – at 192 metres high – when it initially broke ground in 2008. While construction came to a halt in 2009, it later re-commenced in 2010. The building currently consists of 32 floors.
While the development has been stop-start for years, finding a new developer for the project has been a likely option for some time, according to a real estate industry insider who spoke to Post Property on condition of anonymity.
Due to the “tarnished reputation” of the tower and the advanced construction of the development, however, little interest has been shown.
“New developers coming into the Cambodian market would not touch this project and pay market prices because they are stuck with the current design. They would have to follow through because building the project [from scratch] would result in high costs,” the source said.
While foreign developers would steer clear of such a controversial development, a local developer with adequate resources might snatch up Gold Tower 42 and complete it while not relying on initial speculative funding already generated from the project’s pre-sales, the source added.
The source believes there is only one developer in the local market that could finance and complete the development if the project proved to deliver high returns.
“It would have to be a developer with direct access to deep financial resources. They would start building right away, not do any pre-sales or advertising, and sell units once the development is completed. It would just be a math problem in that the developer would be assured that there will be a profit at minimal risk,” the source concluded.
While Gold Tower 42 has been dogged by rumours the project would be taken on by Overseas Cambodia Investment Corporation (OCIC) and financed by Canadia Bank, Touch Samnang, OCIC’s project manager denied a deal was currently on the table.
Attempts to meet the building’s developer were unsuccessful after a security guard insisted the developer was not taking press queries.
Po Eavkong, general manager of Asia Real Estate, said the Gold Tower 42 situation is complicated, noting that there is no real estate law in Cambodia that could easily solve the problem.
“The priority is for the ministry to convene a meeting with those investors again to hear their issues and find [non-jurisprudent] solutions,” he said.
