After a several years of economic stagnation, development activity is starting to pick up again in Bavet, a town on the Vietnamese border in Svay Rieng province whose fortunes are tied to its casinos and cross-border trade. Local officials and property experts say commercial activity inside the city of 50,000 and the industrial parks on its outskirts is bustling, which has put upward pressure on real estate prices.
Pen Phearun, head of administration for Bavet City Hall, said the improving economic climate in the city has caused real estate activity to perk up and he has noticed a recent spike in the number of property transactions, particularly people buying land and subdividing it into smaller lots for resale.
“Currently, investments in the city are mostly geared toward commercial activity, factories, enterprises and real estate,” he said, adding that while prices were going up, they still remain affordable and attractive to investors.
Bavet enjoyed a period of prosperity after the government formally introduced a policy for special economic zones (SEZs) in 2005, with the Manhattan Special Economic Zone becoming the first private industrial park to be established under this model. Four more SEZs have since been developed in and around the city, with a total of nearly 60 factories that provide jobs for more than 40,000 workers.
Investment in the SEZs had slowed in recent years, as did interest in the city’s casino sector, which attracts Vietnamese punters who were until recently forbidden by law from gambling in their home country. Nearly a dozen brick-and-mortar casinos line National Road 1, which passes through Bavet to the Vietnamese border post on the eastern edge of the city. Turnover has been high in recent years, with some casinos abandoned and others shifting to online gaming to compensate for declining traffic.
Kim Heang, president of the Cambodian Valuers and Estate Agents Association (CVEA) and whose home city is Bavet, said an influx of new investment, particularly from Chinese investors, is driving development in Bavet’s SEZs and providing jobs for tens of thousands of workers. He said the city’s rising population and increased commercial activity, as well as the re-opening of hotels and casinos that shut down for several years, have led to higher property values and a flurry of real estate transactions.
Heang said after several years of stagnation property prices in Bavet are surging once more and in some parts of the city land prices have doubled in the last year.
“Nowadays, people can build houses for rent or sale, sell divided lots of land or even build a market, because there are a lot of people living in the city,” he said.
According to Heang, sale prices on land located in commercial areas or adjacent to National Road 1 have risen to $200 to $300 per square metre. Plots in industrial areas are fetching $30 to $50 per square metre, while land far from the main road can still be purchased relatively cheaply at between $5 and $20 per square metre.
Mey Kalyan, senior adviser to the Supreme National Economic Council, said Bavet holds high economic potential due to its proximity to Vietnam and the government should consider investing heavily in developing the city and its logistics network.
“The government should invest more in infrastructure in order to facilitate transportation and attract more investors to the city,” he said. “Being next to a bigger and more developed country than its own, Cambodia can receive a lot of benefits and influence from its neighbour.”
Kalyan added that particular attention should be paid to developing transportation infrastructure as Vietnam’s massive container port at Cai Mep is positioned closer to Cambodia’s major trading partners than its own seaport in Sihanoukville.
A project to build a 167-kilometre expressway between Phnom Penh and Ho Chi Minh via Bavet has already been approved. Currently, the shortest route to between the two cities is about 232 kilometres long along National Road 1, which also crosses the border at Bavet.