Logo of Phnom Penh Post newspaper Phnom Penh Post - Investors firmly behind Gold Tower

Investors firmly behind Gold Tower

Investors firmly behind Gold Tower

Despite freeze on new foreign investment from Korea
Despite freeze on new foreign investment from Korea, showplace tower to continue on schedule Tracey Shelton

Site preparation continues on the Gold Tower project.

FINANCING for the Gold Tower 42 residential high-rise development is secure despite the impact of the global credit crunch on South Korea's financial system, the developer behind the controversial project said.

"[Financing] for my project is 100-percent complete," Nov Rattana, general manager of Yon Woo Cambodia, told Prime Location.

He refused to disclose financing details but confirmed when pressed that a key backer was South Korea's military pension fund. The Military Mutual Aid Association is one of Korea's largest pension funds with over $6.6 billion under management.

The assurance came after the South Korean government issued a statement last week urging banks to sell foreign assets in order to raise foreign currency for lending to domestic firms struggling to secure credit.

South Korea has been especially hard-hit by the global financial crisis. The South Korea won has tumbled 33 percent this year, hitting 10-year lows against the dollar on persisting dollar shortages.

Nov Rattana said the 42-storey, $240 million development at the corner of Monivong and Sihanouk boulevards was on schedule for completion by 2011. "The project will be completed on time because we promised the prime minister," he said. "If not complete on schedule, we also have to pay a penalty to our customers."

The company told the Post in May that it had already sold 75 percent of the residential units in the tower, which are priced from $459,000 to $1,500,000. Around 30 percent of buyers were from offshore, mostly from South Korea. Prime Location understands Yon Woo is now gearing up for another promotional sales blitz through the advertising agency Povicom, though Nov Rattana would not confirm details or provide up-to-date sales figures.

Whisper campaign

Gold Tower 42 has long been plagued by whispers claiming the development was in trouble. Rumours even made their way into the Khmer-language press earlier this year that Yon Woo Cambodia had abandoned construction, leaving depositors in limbo.

In May, when the rumours were at their peak, Yon Woo director Lee Sun Hum told the Post the project was like a slandered celebrity. "A rumour is only a rumour," he said. "Our company, being famous, must suffer from rumours created by others."

South Korea's financial problems have been exacerbated by record levels of investment by South Korean firms offshore and dwindling investment by foreign firms in the domestic market.

Data released by South Korea's central bank on October 5 showed a net foreign direct investment outflow of $9.66 billion in the first eight months of the year, almost double last year's $5.23 billion net outflow and the largest in the 28 years the Bank of Korea has been collecting data.

Only US$26 million in foreign direct investment flowed into the country over the period, just 1.5 percent of the $1.68 billion inflow for the same period a year earlier. FDI outflows by Korean investors amounted to $9.68 billion, up 40 percent from $6.88 billion a year earlier.

Union Commercial Bank CEO Yum Sui Sang said South Korean firms had long been encouraged by their government to invest in offshore property.

"Now there are restrictions on outflow," he said, adding that he had heard market rumours the South Korean government would announce new regulations concerning offshore investment financing in October.

Many Korean developers are already looking to buy smaller land blocks for projects costing $2-3 million, Yum Sui Sang said.

MOST VIEWED

  • Cambodia rejects UN rights claim

    Cambodia's Permanent Mission to the UN Office in Geneva on Friday hit back at David Kaye, the UN special rapporteur on the Promotion and Protection of the Right to Freedom of Opinion and Expression after he raised concerns over the repression of free speech and

  • Ex-party leader, gov’t critic named as secretary of state

    A former political party leader known for being critical of the government has been appointed secretary of state at the Ministry of Rural Development, a royal decree dated July 9 said. Sourn Serey Ratha, the former president of the Khmer Power Party (KPP), told The Post

  • Residence cards set for over 80,000 immigrants

    The Ministry of Interior plans to grant residence cards to more than 80,000 immigrants to better keep track of them. The ministry announced the plan on July 10, following the results of an immigration census. “An inter-ministerial committee and many operational working groups have been set up

  • Fifteen Cambodians from Saudi get Covid-19

    The Ministry of Health on Sunday confirmed 15 more imported cases of Covid. The 15 men ‒ all Cambodian aged 21 to 33 ‒ arrived from Saudi Arabia on Friday via a connecting flight in Malaysia. They were travelling with 79 other passengers, three of them women. The ministry said 80 of the

  • Ministry requests school opening

    The Ministry of Education, Youth and Sport on Thursday said it would request a decision from Prime Minister Hun Sen to allow a small number of schools to reopen next month. Ministry spokesman Ros Soveacha said if the request is granted, higher-standard schools will reopen

  • Kingdom eyes India FTA, China deal set for August

    Cambodia is studying the possibility of establishing a bilateral free trade agreement (FTA) with India to open a new market with the second-largest regional economy. This comes as an FTA with China is scheduled to be signed next month while similar negotiations with South Korea

  • Judge lands in court after crashing into alleged thief

    Sen Sok district police on Thursday sent a Koh Kong Provincial Court judge to the Phnom Penh Municipal Court on manslaughter charges after he crashed his car into a woman riding a motorbike on Wednesday, killing her. District police chief Hour Meng Vang told The

  • Vietnamese workers in Koh Kong questioned

    The General Department of Immigration (GDI) is questioning 49 Vietnamese nationals who were working illegally in Koh Kong province to build a case and send them back to Vietnam, its Department of Investigation and Procedure director Kem Sarin said on Thursday. GDI forces and provincial authorities

  • Preah Vihear court drops charges against villagers

    The Preah Vihear Provincial Court has dropped all charges against eight ethnic Kuoy villagers who were in a land dispute with the Hengfu Group Sugar Industry Co Ltd since 2014. Wednesday’s decision was made by the judge who tried the case on June 10. The eight

  • Gov’t to boost Siem Reap tourism

    The Ministry of Tourism released the results of an inter-ministerial committee meeting concerning Siem Reap province’s Tourism Development Master Plan for 2020-2035 on Wednesday, revealing the government’s plan to improve the overall tourist landscape there. The meeting was attended by Minister of Tourism