June 22, 2011

Cambodia construction industry rebounding

Cambodia’s construction industry has experienced an 87 per cent increase in government-approved investment in the first five months of 2011 compared to the previous year.

Officials have approved 868 projects worth roughly US$505 million up to the end of May this year, up from the 889 projects worth US$270 million in the same period of 2010, according to figures just released from the Ministry of Land Management, Urban Planning, and Construction.

Despite the decrease in the number of projects approved, larger projects have more than made up for it in terms of revenue.

Construction projects of more than 3,000 square met-res have risen by 153 per cent, Construction Department director Lao Tip Seiha told the Phnom Penh Post. They included condominiums, garment factories, warehouses, oil and gas stations and markets, among other buildings, he said. “Even though we got fewer construction projects than last year, they are still large projects with big value,” Lao Tip Seiha said.

He also noted that the growth in investment had outpaced the hiring of new workers to service some of the projects.

At the same time, insiders have pointed to the rise in overall activity in the real estate sector. “There are a lot of transactions happening now, as investors look to buy and sell large properties in Phnom Penh and on the outskirts of the city,” Cambodia Properties Limited managing director Cheng Kheng said.

Total construction investment for 2010 reached US$840 million as a result of 2,149 projects in the Kingdom. Investment during the previous year had been significantly larger, as nearly US$2 billion had been spread across 2,230 projects, according to Construction Ministry data.

The National Bank of Cambodia’s 2010 annual supervision report shows lending to construction increased by 2.9 per cent in 2010 over the previous year, although overall lending increased by 25 per cent during that period.

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