Poipet real estate market full steam ahead
27 April 2018
The reopening of a 48-kilometre rail line between Poipet and Serey Sophorn in Banteay Meanchey province this month was a milestone in the long-delayed plan to restore passenger and commercial train service along the Northern Line that connects Poipet to the capital. But it is also a huge boost to the local economy, expected to reduce transport costs and facilitate trade, and which is having a palpable impact on real estate prices in the cities it connects.
Sun Chanthol, Minister of Public Works and Transport, said during the launch ceremony for the rehabilitated section of rail line on April 4 that work on the rest of the 336-kilometre Northern Line was nearing completion.
“The Poipet-Serey Sophorn railway service is just the first step of our project to restore the rail line,” he said. “The next steps will be connections to Battambang and Pursat, and then Phnom Penh.”
He said the section between Serey Sophorn and Battambang should start service in May, with an extension to Pursat to open a month later and the final stretch to Phnom Penh completed by the end of the year.
San Sean Ho, governor of Poipet city and a local real estate developer, said he expects the railway to improve livelihoods and accelerate commercial growth.
“The reopening of railway link between Poipet and Serey Sophorn will reduce people’s travelling cost and traffic accidents, and at the same time help expand trade and investment in the city,” he said. “The real estate sector, in particular, will benefit from the city’s expanded trade and investment, especially with Thailand when there is influx of people coming to work in the city and seeking accommodation.”
He added that his office was prioritising infrastructure projects in the city to support an ongoing property boom. All roads in the city are being repaired and new circles are in the plan to turn Poipet into a beautiful city.
The city currently has 10 borey (gated residential community) projects and at least 50 companies sub-dividing residential plots for resale.
Sean Ho said he believes Poipet’s improved connectivity and rapid development will lead to a spike in property prices in the entire city, especially properties adjacent to casinos, with prices reaching as high as $1,000 per square metre.
According to a recent report by Phnom Penh-based real estate firm CL Realty, commercial-zoned land located along main roads in Poipet was selling last year for between $500 and $1,000 per square metre. Undeveloped residential land, as well as industrial plots, were fetching between $100 and $500 per square metre.
Sorn Seap, CEO of Key Real Estate, said he does not expect the rail link between Poipet and Serey Sophorn to have an immediate impact on property prices or development in the city. That will happen once the rail connection to Phnom Penh is completed at the end of the year.
He said Poipet has “huge potential for real estate investment” due to the city’s location and the government’s plan to turn it into an industrial hub and open more border crossings to neighbouring Thailand.
Located opposite Aranyaprathet in Thailand’s Sa Kaeo province, Poipet’s casinos attract Thai gamers forbidden from gambling on their own soil, while its industrial parks appeal to manufacturers seeking to utilise the city’s cheap labour and proximity to the Thai market.
Experts say the real prize in railway development is not Poipet’s imminent railway connection to Phnom Penh, but rather the planned linkage to Thailand’s rail network, which would enable passengers and cargo to travel from Phnom Penh to Bangkok and Singapore.
The State Railway of Thailand (SRT) has completed the rehabilitation of the 6 kilometre section between Aranyaphrathet station and the border crossing at Ban Khlong Luek. Work on the 1.3-kilometre section from the Cambodian side of the border to Poipet station is also reportedly finished.
However, state-level discussions regarding border arrangements have not yet been finalised, and it remains unclear when cross-border service between Cambodia and Thailand will resume.
Local residents, especially land owners, are optimistic that the new rail connection will bring more trade and investment to Poipet, and see more factories opened in the city’s special economic zones.
Sok Vutha, who owns a one hectare plot of undeveloped land about two kilometres from the city center, said he expects to start receiving offers on his property now that the railway line has been restored.
“I am very happy that the government finished the rail link in Poipet this month,” he said. “I believe that this will attract more factories and people to come and work in Poipet, and as a result my property will increase further in value.”