2015 was a record-breaking year
Approved construction projects in Cambodia in 2015 grew to an estimated value of USD3.33 billion, a 33 percent year-on-year increase from the previous year, according to the latest report released by the Ministry of Land Management, Urban Planning and Construction (MLMUPC).
The Phnom Penh Post reports that the value of more than 2,300 approved projects last year, measuring up to 7.7 million sqm, surpassed the 2014 record of USD2.5 billion.
“Investors have confidence in the political and social stability of the country, especially since the Royal Government is focusing more on the construction industry,” said Seng Lot, a spokesperson for MLMUPC.
He added that “the rapid growth in investment in 2015 is the result of economic growth which Cambodia has achieved over 7 percent in recent years, and we expect it to continue rising in the next few years.”
According to the ministry, most construction projects can be found in Phnom Penh, Seam Reap, Sihanoukville and Kandal provinces.
China is currently one of the major foreign investors in Cambodia, with 83 out of 135 registered Chinese companies reporting nearly USD946 million in property investments, including the 100-hectare Diamond Island mega-project.
Despite the economic slowdown on Mainland China, the inflow of construction capital seems to be unaffected. Per MLMUPC, Chinese investors have surpassed Korean companies, which previously dominated the industry.
The MLMUPC will formally announce the construction industry’s record-breaking year at the annual meeting in February, the month when the inaugural Cambodia Property Awards will be held.
Some industry experts are concerned, however, that announced projects may be outpacing actual demand for property in Cambodia.
“I acknowledge that there are many construction projects, but the level of demand is unknown,” Kang Chandararot, director of the Cambodia Institute of Development Study, told The Cambodian Daily.
The economist noted that actual demand cannot be determined, and that developers should take into consideration the selling price of properties to appeal to many buyers.
Otherwise, “I think this year there will be some disappointment,” he added.