China is fueling a property boom in this Southeast Asian country

Slowing sales and rentals in Cambodia raise concerns about sustainability

New York Weekend Edition /
Sep.September 15, 2018 08:00 AM

The city of Phnom Penh in Cambodia (Credit: iStock)

One of the fastest property booms in the world is happening in Cambodia, largely thanks to buyers and builders from China.

Phnom Penh, the country’s capital, is going through a rapid transformation, with high-rise condominiums replacing heritage sites, according to Bloomberg. However, with Cambodia’s median household income at just about $11,000 per year, sales and rentals have already started slowing down.

The city is an example of wealthy Chinese developers looking for foreign governments to offer up prime land for investment. Several of those bets have been suffering lately as governments that approved them get voted out, and the developments themselves lead to rising prices and resentment among locals.

The pipeline of projects backed by China does not appear to be slowing down in Cambodia, though, as Prime Minister Hun Sen maintains close ties with China and extended his 33-year reign in July after disbanding the main opposition party.

Mey Kalyan, senior adviser to the Supreme National Economic Council, told Bloomberg that the country was still concerned about relying on China too much.

“We must come up with strategies to manage this investment to avoid problems in the future,” he said. “We should not allow just one country to dominate investment.”

Average condo prices in the capital were $3,200 per square meter, and the supply of condos is expected to double to more than 20,000 units this year.

Projects include a $2.7 billion, 133-story Twin Tower World Trade Center and 24 high-rise buildings along the riverbank in Phnom Penh. The government also wants to build a new $80 billion capital north of Phnom Penh dubbed “Samdech Techo Dragon City.” [Bloomberg]Eddie Small


Related Articles

arrow_forward_ios
Construction labor management platform Bridgit raises $24M
Construction labor management platform Bridgit raises $24M
Construction labor management platform Bridgit raises $24M
Lennar, Icon teaming up on 3D-printed development
Lennar, Icon teaming up on 3D-printed development
Lennar, Icon teaming up on 3D-printed development
Harlem River Houses approved for $130M facelift
Harlem River Houses approved for $130M facelift
Harlem River Houses approved for $130M facelift
Extell Development chairman Gary Barnett and the empty lot between 79th and 80th on First Avenue (Google Maps)
Extell building 30-story medical tower on UES
Extell building 30-story medical tower on UES
Millennium Partners' Philip Aarons and a rendering of the Hollywood Center project (Getty, Rendering via Handel Architects)
Shaken, not stirred: Inside Millennium’s battles at Hollywood Center
Shaken, not stirred: Inside Millennium’s battles at Hollywood Center
BRP’s controversial Bed-Stuy project wins approval
BRP’s controversial Bed-Stuy project wins approval
BRP’s controversial Bed-Stuy project wins approval
Crow Holdings, Marcus Partners teaming up for luxury Westchester multifamily
Crow Holdings, Marcus Partners teaming up for luxury Westchester multifamily
Crow Holdings, Marcus Partners teaming up for luxury Westchester multifamily
Madison Realty Capital Co-Founders Josh Zegen and Brian Shatz with a rendering of the River North development (Madison Realty Capital, FXCollaborative)
Madison Realty’s altered plans for SI complex approved
Madison Realty’s altered plans for SI complex approved
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...