SOM Corp and Tama Home view cooperation in Cambodia
OCAL construction firm SOM Corp is looking to form a joint venture with Japanese developer Tama Home Co to build villas and apartments in Cambodia, a SOM official said.
SOM General Director Som Monorak said the current construction downturn resulting from the global financial crisis meant it was a good opportunity to enter the market.
"We are interested in investing now because we think that it is a good chance to have success while others stop their developments and withdraw their money," he said.
"Those who dare to invest in the sector at this time will find success in the near future. The crisis won't last for ever."
He refused to disclose financial details but said a decision on whether to proceed would likely be made in November following a feasibility study by both companies.
"First, we will study the opportunity in Phnom Penh, especially for villa and apartment development, and later we plan to expand into other provinces nationwide," he said.
Although recent construction ministry figures show approvals for new projects almost doubled in the first quarter of 2009 compared to a year earlier to US$919 million, there has been a widely acknowledged slump in actual building activity across the country since the middle of last year.
According to the UN Development Programme, more than 30 percent of construction projects may have been put on hold since the economic crisis hit Cambodia.
However, mass layoffs among construction workers and falling raw material prices have given a boost to developers with the cash reserves or access to credit needed to push ahead with developments.
Those who ... invest in the sector at this time will find success in the near future.
Hopes of more to come
Im Chamrong, director general of the Ministry of Land Management's construction department, said other Japanese developers were also looking at Cambodia, though most were focused on the tourism-related developments.
"This shows that our real estate sector is still interesting to foreign investors, and with their eyes on us, the sector is going ahead," he said.
National Valuers Association of Cambodia President Sung Bonna said Japanese companies were not big investors in Cambodia's property sector but that he hoped others would follow in Tama's footsteps if its ventures proved successful.
"It would be great for us if we can really attract those investors," he said. "The time is right for them because they know the real requirements and market demand in Cambodia."
SOM was first registered in 1992 as Phnom Penh Construction. It was renamed SOM Corp in 1997 with Som Chheng as president. Som Monorak was appointed general director in 2001.
According to the company's Web site, its notable projects include Siem Reap's Angkor Lucky Department Store in 2007, the Ministry of Culture and Fine Arts in 1997, the ambassador's residence for the Japan Embassy in 2002 and the Intercontinental Hotel in 1995.
Tokyo-based Tama Home was founded in 1998.