The number of government-approved construction plans for property continues to soar, a leading global real estate firm reported.

In May 2012, Phnom Penh saw an approximately 275 per cent month-on-month increase in construction approvals for property development, according to the latest MarketView report by investment property agent CB Richard Ellis (CBRE). The Ministry of Land Management, Urban Planning and Construction approved construction on 600,000sq.m, the report says.

Sung Bonna, president and CEO of Bonna Realty Group, confirms that the number of construction approvals is increasing in 2012. “In the first semester of 2012, the action of construction has been quite a lot. New developments start to grow more and more.”

He said especially medium-class residences and commercial property gets approved.

In March, 17.8 per cent of the construction approvals value went into the development of condominiums and apartments, according to the report released by CBRE Cambodia Research and Consultancy.

In 2011, construction approvals granted by the government increased 158 per cent in the first 11 months, the Post reported.

Country head of Knight Frank Cambodia, Sunny YL Soo, said approvals and the actual building of property construction projects in Phnom Penh have increased.

He says while approvals are a good indication of more construction to come ‘’this doesn’t mean the project will kick-start. There are situations in which approval is given but the project never kick-starts.’’

Cambodia’s construction boomed alongside its economic growth which was triggered by a growth in exports, increased foreign direct investment (FDI) and a majority of Cambodians aged beneath 30 who buy consumer goods, Cambodia has registered positive GDP growth in 2012 so far.

Predictions indicate this trend is likely to continue, with an estimated GDP growth of 7 per cent next year, the study reported.

Augmented tax revenues indicate economic growth. After domestic taxes have been increasing by 26.2 per cent year-on-year, in April the government’s tax revenue grew by more than a third compared to the previous month, CBRE said.

Driven by a growing service sector and FDI, Cambodia’s economy boomed with two-digit growth between 2004 and 2008, according to CBRE.

Cambodia still relies heavily on garment manufacturing and rural agriculture. Most of the FDI goes into agricultural projects in rural areas, the report said.

CBRE is the largest property investment agent in the world, counting offices in 52 countries. CBRE has been operating in Cambodia for 20 years and publishes a monthly MarketView report, giving a brief overview of the current economic market conditions.