Fuelled by vast streams of FDI, the construction sector last year was identified as the locomotive of Cambodia’s economy, providing the largest share of GDP growth ahead of the agriculture and the garment industries.
Most notably, the real estate boom has taken a grip on Phnom Penh; with construction within eyesight in every direction. What is certain is that the face of Phnom Penh is changing and the capital is becoming a directive force.
How exactly it is becoming so is the subject of much speculation and debate.
A master plan for Phnom Penh – dubbed Phnom Penh Land Use for 2035 – supposedly exists. However, it has yet to show itself in physical form to the public, real estate developers and even some regulators.
While there is no all-encompassing vision for the future of the city, shareholders follow their own visions and motives, which are sometimes counter-productive, resulting in haphazard ‘zoning’ that mars the organisation of the city.
Former City Hall spokesperson Long Dimanche once confirmed to Post Property that private developments have often hindered meaningful infrastructure development, which has taken a toll on the quality of life for some people living in Phnom Penh.
A well-known example of rapid private development occurring without much infrastructure forethought is in BKK 1. The upscale neighbourhood, paved with coffee shops, residential and commercial high-rises and schools, falls a permanent victim to severe traffic congestion.
Eventually, the drop in liveability takes a toll on the city’s economic potential as well.
Some real estate experts say that it will be hard or near impossible to adjust lacking infrastructure in densely developed areas, citing the afore-mentioned example as diminishing the potential for future business investments.
Fortunately, though, some private developers and regulators are beginning to realise that investing in property unsuitable for the surrounding infrastructure of the area comes at their own cost.
Developers and buyers are increasingly drawn to the “clean slate” areas of the city where meaningful developments are meticulously planned and implemented from scratch. Zoning, accommodating for road capacity, and creating green spaces will make the areas they develop liveable and more valuable.
The city now has the potential to become a cluster of well-planned and highly liveable smaller centres.
Delving further into what the future may hold for Phnom Penh, developers of the Phnom Penh City Centre and Post Property invited leading industry experts from diverse fields of expertise to have a panel discussion on the capital city’s real estate sector of the last few years and the near future.
This happens today, September 22, at the Sofitel Phnom Penh Phokeethra hotel, where a select group of invited CEOs and investors will raise pressing questions and participate in a stimulating brainstorming session.
The focus of the discussion will be on urban planning, the relationship between regulators and developers, the buyer market, and the importance of sustainable development in creating a liveable, modern capital city of a Cambodia that is opening up to the global platform.
The following industry experts will be on the panel; the following are their brief perspectives on the industry:
Group CEO, Cambodian Investment Management
Chairman, Phnom Penh BG Serviced Office
Chairman, EuroCham Cambodia Tax Committee,
Chairman, Premium Human Resources
Chairman, Jump Digital (Cambodia)
‘Severe lack of complementary infrastructure support’
“The super-fast pace of real estate development in Phnom Penh has upgraded the quality and choice of available properties in a once antiquated Phnom Penh real estate market. Unfortunately, the unhampered surge in construction is evolving into a classic real estate bubble with looming over-capacity and a severe lack of complimentary infrastructure support. While cheerleaders are spinning the hype that foreign investment, population growth, and the developing lower middle-class will underpin the market growth and justify the boom in construction, the reality is that the scale inventory coming to market in the next three years is setting Cambodia up for its first sizeable property market downturn.”
Senior Associate Director, CBRE Cambodia
‘This is the most exciting time in real estate’
“Despite naysayers and those predicting near apocalyptic scenes due to the development pipeline of 20,000 + condo’s, this is without doubt the most exciting time in real estate, design, architecture and the built environment in Cambodia since the 1950’s and 1960’s when Vann Molyvann and a generation of Cambodian architects began transforming the face of the Kingdom of Cambodia.”
CEO, Shukaku Inc.
Managing Director, Phnom Penh City Center (PPCC)
‘We need to invest in high quality urban infrastructure’
“To sustain Cambodia’s strong economic growth, we need to invest more in high-quality urban infrastructure, yet such largescale investments have not been fully initiated. With the Phnom Penh City Center, we plan to improve the city’s connectivity, accessibility and liveability particularly in the western part of modern Phnom Penh and help position our capital city as an integrated hub for growth and innovation.”
Dr. Sok Siphana
Managing Partner, Sok Siphana & Associates
Advisor of the Royal Government of Cambodia
‘The draft construction law has adequate provisions to ensure proper executions of construction works’
“From the legal framework perspective, a quality real estate development project would benefit tremendously from the enactment of a comprehensive building construction law. The draft construction law, which is currently being reviewed by the MLMUPC, is quite comprehensive and provides for the adoption of a building construction code and the setting of performance standards for buildings to ensure quality building works. It establishes a licensing regime for building construction practitioners in order to regulate the practice of qualified persons such as architects, engineers, general or specialist building contractors and third party certifiers. It has adequate provisions to ensure the proper execution of construction works through stricter enforcement related to survey, design, execution, supervision, and maintenance and technology management of construction works.”
CEO, Khmer Real Estate,
President, Cambodian Valuers and Estate Agents Association (CVEA)
‘The infrastructure quality in undeveloped areas will be the same’
“There are hundreds of thousands of Cambodians from the rural areas moving into Phnom Penh for education, work, business and more. They all need housing. This makes any business related to real estate, construction and finances a profitable business. It is a good idea to build a five-star condo in Khan Chamkamoun, a three to four Star Condo in Khan Toul Kork and two-star condo in Khan Sen Sok.
In the next 10 to 20 years, the prices of houses or condos in Khan Chamkamoun, Toul Kork and Sen Sok will not be much different from each other because the infrastructure, lifestyle and social facilities in those areas will be similar or almost the same.”