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Stagnated Korean real estate projects show signs of green shoots

The unfinished Gold Tower 42 project is in a prime location on Sihanouk Boulevard. HONG MENEA
The unfinished Gold Tower 42 project is in a prime location on Sihanouk Boulevard. Hong Menea

Stagnated Korean real estate projects show signs of green shoots

Korean-backed real estate projects in Cambodia have struggled to get off the ground over the years, but the tide could be changing, albeit only slightly.

The stalled $1.1 billion Booyoung Town residential and commercial development on Russian Boulevard in the Sen Sok district which kicked off construction in 2013 but halted work only months later is slowing making progress. Meanwhile, Camko City’s massive residential project, which has previously faced delays, looks set to be back on track with the developer World City telling Post Property that the condos would be completed next year. The initial timeframe for completion was 2017.

“Simultaneously, the company is in the stage where it is negotiating with other partners in Korea to start on other projects in this satellite city,” Kheng Sae, head of project management and legislation at World City, said.

As for Booyoung Town, the South Korean company behind the $1 billion project is understood to be on track to finish the first stage of the project in 2019.

Construction work is slowly picking up at Booyoung Town.
Construction work is slowly picking up at Booyoung Town. Post Staff

A member of the Booyoung Town management team who asked not to be named told Post Property the company was completing the groundbreaking of four buildings and plans to build another four, 23-storey residential complexes as well as a 3-storery shopping mall.

“For the condo units in this project, we will focus on [selling to] just Cambodians, and we are working on the price of the units very carefully,” said the manager. “The sale of the residential units might start after the 2018 national election.”

While the pace looks to be picking up for Booyoung Town and Camko City, the dormant Gold Tower 42 project along the crossing between Monivong and Sihanouk Boulevard is still yet to resume construction.

Korean owner Yon Woo Co. Ltd has made numerous promises to the Ministry of Land Management, Urban Planning, and Construction (MLMUPC) to restart construction in recent years to no avail.

A representative for Yon Woo Co. Ltd refused to shed any light on the state of Gold Tower 42.

“We don’t have anything to say to the press yet. Once we do, we will inform them,” he told Post Property.

The Gold Tower 42 project was once tipped to be Cambodia’s tallest building – at 192 metres high – when it initially broke ground in 2008. While construction came to a halt at the height of the global financial crisis in 2009, the development has been stop-start for years.

Phnom Penh resident Kong Malin, who frequently drives past Gold Tower 42, said the unfinished building was a bad look for the city’s real estate industry.

“I don’t know the reason behind the postponement of its construction, but I want this building to resume its construction, not be abandoned like this,” she said.

Chrek Soknim, CEO of Century21 Mekong, urged the owner of Gold Tower 42 to inform investors on the status of the development and shed light on future plans for its completion.

He added, “Whether or not trust is lost, I don’t know how to say this, but whatever the project’s owner is facing, they should solve it. Korean investors were the first to come and contribute to the sectors growth.”

Thida Ann, associate director of CBRE Cambodia, didn’t believe the stagnation of various real estate projects in the capital triggered the loss of trust in the market.

“Any investor from anywhere could face problems and prolong the schedule. It’s normal,” she said.

Land Management Ministry spokesman Seng Lot refused to comment on the stop-start nature of real estate projects in Cambodia when contacted by Post Property.

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