Despite prevailing unfavourable macro-economic conditions in Phnom Penh’s residential property sector, Singapore developer TEHO International has pledged its commitment to continue developing its recently suspended The Bay project – although not immediately.
In late August, TEHO halted works on its troubled $500 million upscale real estate project, located on Chroy Changvar peninsula, as fears of condominium oversupply casted a shadow over the project’s viability.
The decision, and the poor performance of its property development segment, resulted in the company booking a $16.4 million impairment charge in the 2016 financial year, while its entire property development division posted a 15 percent year-on-year dip in revenue to $5.1 million.
In a forward-looking statement, TEHO executive chairman and CEO Lim See Hoe said the company would focus on improving operational efficiencies across the board.
“The group will continue to take proactive measures to keep costs low, monitor credit risk exposure and maintain an optimal amount of inventory so that we stay operationally lean and fit to ride out the challenges,” Hoe said in the company’s recently released annual report.
Despite the less than favourable conditions for The Bay, TEHO is eager to reposition the project to ensure its eventual success.
“As we work to reposition The Bay development to best capture Phnom Penh’s potential, we will continue to invest attention and resources into projects that will enable The Bay to gain a creditable foothold into Cambodia’s property sector,” Hoe said.
At present, TEHO is working with its project joint venture partner, Yim Chhay Line – daughter of Deputy Prime Minister Yim Chhay Ly – in assessing Phnom Penh’s market changes to rework the project. However, the company has remained tight-lipped on the details of any new development plan.
Earlier this year, TEHO inked a hotel management agreement with Hotel Okura to develop and manage The Okura Prestige Phnom Penh hotel which would operate within The Bay development.
Envisioned as a luxury hotel catering to business and leisure travellers, Hoe has again expressed confidence in the hotel’s ability to become an integral feature of The Bay.
The large-scale Bay project, which was initially tipped to begin construction at the end of 2015, had envisioned seven buildings in total, including The Bay Suites and The Bay Residence.