The value of construction projects approved by the government in 2015 increased by 33 percent to about $3.33 billion compared to the previous year, according to a government report obtained on Sunday.
The 2,305 projects approved last year by the Ministry of Land Management, Urban Planning and Construction covered approximately 7.7 million square meters of construction area, according to the report, which was printed ahead of the ministry’s annual meeting in February.
Cheam Sophalmakara, a spokesman at the ministry, said most construction projects last year were located in Phnom Penh and in Siem Reap, Preah Sihanouk and Kandal provinces, and that they were primarily backed by Chinese and Japanese investors.
“Chinese and Japanese investors are the main contributors to the increase, especially in tower building projects, while local investors mostly put their money in ‘boreys’ and condominiums,” Mr. Sophalmakara said.
Sung Bonna, chairman of real estate firm Bonna Realty Group, said property investors had found Cambodia particularly attractive last year in anticipation of the December 31 launch of the Asean Economic Community, and because they were seeking to redirect investment away from weaker markets in the region.
“Stock markets in other countries, especially China and those in the region, have been going down remarkably and so investors have lost confidence in the stock markets and turned their interest to the real estate sector,” Mr. Bonna said.
Cambodia, Mr. Bonna added, presented more open land than countries like Singapore, Malaysia, Thailand or Vietnam. “There is not enough space for…construction projects in other countries,” Mr. Bonna said.
However, despite the growth in construction figures, Mr. Bonna pointed out that announced projects are not always built.
“We are not sure about their actual development, spending and how long those projects will take to be completed,” he said.
Kang Chandararot, director of the Cambodia Institute of Development Study, also struck a cautious note, saying that growth in construction may be outpacing demand.
“I acknowledge that there are many construction projects, but the level of demand is unknown,” the economist said.
“Demand depends on income, which has not increased much,” he said. “Consequently, [property] sales will be low unless the price is lowered…so I think this year there will be some disappointment.”