What does the recent rejuvenation of the ‘old lakeside’ mean for property development?

Few neighbourhoods have such a traumatic recent history as the Boeung Kak Lake area. Bin Si Mony, a local shop owner, settled there after the Khmer Rouge regime in 1980. She witnessed the area as it grew from being sparsely inhabited by government workers to gaining popularity with the influx of foreigners as the tourist industry opened up in the mid-90s. But then, she says, “the filling in of the lake made everything go quiet.”

The 1997 land lease to Shukaku Inc triggered the once-popular tourist spot’s dissolution into neglect, as the lake disappeared and residents were evicted. For a while, it seemed hopeless. “By the time they had finished filling in the lake, the neighbourhood was destroyed. There were a lot of junkies around,” says a French resident of four years, who doesn’t want to be named. Yet around a year ago, colour unexpectedly began returning to the lakeside.

It all started with graffiti – cracked walls covered with surreal creatures and bubble-writing tags. Then in October of last year, a French eatery, Simone Bistro, was opened, followed by two boutique clothes shops. Regular music festivals, clean-ups and street art sessions were held and plans to open a community art space with music recording facilities were announced. Simone was even hosting popular after-work aperitif nights: the neighbourhood which had once seemed like a write-off suddenly had a new, artsy charm.

If this was New York or London, real estate agents would most likely be observing with glee. There, an influx of young urban professionals, boutiques and street art into run down, outlying neighbourhoods herald the beginning of lucrative gentrification. The London suburb of Shoreditch is a well-known recent example of arty, hip twenty-somethings being quickly followed by high-end investment. According to the Financial Times, property prices in the borough have risen 46 per cent in the last three years, to the delight of investors and the ire of the original inhabitants, many of whom have been priced out of the area.

James Padden, surveyor at CRBE Cambodia, explains. “Gentrification from a Western perspective tends to involve wealthy urbanites relocating into cheaper neighbourhoods nearby, containing dilapidated residential property or even old commercial buildings. They then will invest in the properties and improve the neighbourhood. Property prices rise and the area becomes a desirable place to live.” Almost a year after this change began happening in Boeung Kak, is the area becoming more desirable to residents and investors?

Bun Si Mony says she has noticed a change since Simone Bistro arrived. “There are more parties and people coming in now, and I’m happy because it brings me customers. Different people are moving here – a mix of Khmer students and foreigners.”

American videographer Jeremiah Overman is one of those foreigners to have been tempted over to the old lakeside. He moved there in May “because it was cheap. I liked the fact that there were art spaces there; not art spaces like Java cafe but something rawer.”

However, it turned out the area was still a little too raw for him. “I ended up moving out, as I was being offered weed and heroin at 10am. Drug use is pretty out in the open. My rent was only $75 per month, but I had no sink or hot water. It was a one room apartment with the bathroom sectioned off.”

Perhaps it’s too soon to call, but it seems that the signifiers of Western-style gentrification may not quite translate into Phnom Penh’s unique environment and that the glamour of perceived trendiness of an area does not necessarily result in an increased interest in property investment.

Padden agrees. “Gentrification is not a major trend in Cambodia at present. Many affluent locals are attracted to city centre development focused on new, high-rise apartment buildings,” he says. “This is the trend that has been seen across multiple Asian cities. As land prices increase, arguably it makes better commercial sense to build upwards rather than maintain what was there.” The closest trend he sees to gentrification is expat investors acquiring and refurbishing old heritage apartments around the riverside district.

Although districts such as Tonle Bassac and BKK1 have already developed into expensive neighbourhoods equipped with chic bars and coffee shops, it’s less about trendiness and more about convenience. “BKK1 is well located and was one of the first neighbourhoods to see the development of modern serviced apartments, boutique hotels, restaurants and the bar scene,” says Padden. “As this trend continued, it became established as a desirable residential neighbourhood.”

Over at the lakeside, the optimism is quiet but palpable. “The change isn’t massive,” says the long-term French resident. “Rents and prices haven’t increased, but I do notice people renovating their houses as the neighbourhood is picking up and they feel it’s a good time to do it. The lakeside was undoubtedly better before [the lake was filled], but it’s improving – we’re just trying to restore the energy that it once had.”