Develop in the West, but do not forget the beautiful East that is Chroy Changvar with its beautifully boastful appearance. This is the claim that Prime Minister Hun Sen has used for the last decade to encourage investment and development on the dormant peninsula flanked by the Tonle Sap and Mekong rivers, opposite Sisowath Quay and in direct view of the Royal Palace. Despite his efforts to encourage development from the private sector, investors have remained apprehensive due to a lack of infrastructure that limits the flow of traffic and accessibility.
However, 2015 saw the opening of the second bridge linking Phnom Penh to the peninsula as well as the opening of the five-star Sokha Hotel—a mixed-use development with a hotel, retail space and condo units. With new roads beginning to take shape, the long-forgotten area appears to be growing in popularity as land prices soar dramatically on the back of developments like The Mekong View Tower and The Bay.
Meanwhile, property experts with inside information claim that new developments such as The Bali Resort, a Taiwanese-backed development called The Manhattan, and the creation of a Sokha-owned skyscraper will commence construction in 2016.
The lack of accessibility remains a core issue stifling growth to Chroy Changvar’s massive potential. In turn, rumours of the private sector taking up Hun Sen’s encouragement of infrastructure have recently surfaced.
A developer and a real estate specialist, who requested anonymity, said that Sokimex Group—one of the largest gasoline and diesel importers, and owners of Sokha Hotel and Resorts—is currently seeking government permission to construct a new bridge that would connect the Wat Phnom area to Chroy Changvar in the near future. He continued that if the government approves the plan, the peninsula’s growth would be accelerated.
Long Dimanche, spokesperson for City Hall, said that he has not been informed of the plan yet and that, even if such a plan exists, he is unsure if it would receive government approval.
A request to verify this information from Oknha Sok Kong, the head of Sokimex, was not successful as he could not be reached for comment.
Nevertheless, Po Eavkong, Executive director of Asia Real Estate Cambodia said that an overall examination of the increased infrastructure has caused land prices on Chroy Changvar to soar compared to 2014, rising 10 to 15 per cent. However, he added that the actual price developers are willing to pay differ greatly from prices demanded by landowners, some of whom are asking for 50 per cent above perceived market value. This discrepancy, he explained, is because landowners do not take into consideration the viability of development.
He continued that currently, land prices along main roads in this area range from $800 to $1300 per square metre, while land on adjacent roads ranges between $400 to $700.
Chrek Soknim, executive director of Century 21 Mekong, said that Chroy Changvar is a naturally favourable area to develop due to its geographic location. Formerly, this area had not seen large-scale growth, but now is the time, he said.
“Prices have risen since the inauguration of the second Chroy Changvar Bridge and multiple infrastructure expansion schemes in this area,” he explained.
His estimations of land prices differ from Asia Real Estate Cambodia’s, stating that land around main roads is valued at $1800 to $2400 per square metre, while adjacent roads are around $1500 to $1600.
Khum Monyroth, Chairman of Board of Daily Realty Group said that optimism and land prices have doubled this year, especially along National Road 6.
He continued that land prices around Keo Chenda and Tonle Sap roads— both leading towards Sokha Hotel and The Bay— have a price tag of $1500 to $2000 per square metre. However, north of that between National Road 6 and Ly Yongphat Street, prices dramatically fall to $200 to $250 per square metre. He said that this area’s land price has remained low due to a lack of development, unlike the rest of the peninsula further south.
He added that, “as more development projects increase land price around Chroy Changvar area, this area has seen little interest.”
Despite the promise of developments in the peninsula, Po Eavkong said that overall infrastructure is lacking and that there are not enough roads or an adequate sewage system to match the actual level of planned development.
“If the government would rethink their planned usage of this land, with a clear development strategy, Chroy Changvar could escape any future obstacles that deter investment,” he said.
While speculation and rumour are reflected in surging land prices, backed by real developments under construction, it is clear that local real estate experts believe that proper investment in infrastructure could make land on Chroy Changvar highly valuable.