The value of approved construction projects has soared 413 percent during the first three months of the year compared to the same period last year amid an increase in domestic investment and property speculation ahead of planned regional integration next year.
From January to March, there were 50 approved projects valued at $851 million, compared to the 36 projects at $206 million in the first quarter last year, according to the latest figures from the Ministry of Land Management, Urban Planning and Construction.
Reflecting the growth in approved projects, the import of construction materials increased from about 260,000 tons during the first quarter of 2013 to 619,000 tons in 2014, a 238 percent increase.
Land Management Ministry spokesman Beng Hong Socheat Khemro said the huge increase in promised investment was down to greater macroeconomic stability and an improvement to the legal framework.
“Cambodia has been able to maintain political and macroeconomic stability, which has given investors confidence, and we have improved the legal framework,” he said
Hin Socheat, deputy head of research at local realtor Bonna Realty, said the increase in approved construction was down to growing investment amid speculation that the country’s property market will expand when Cambodia becomes integrated into the Asean Economic Community (AEC) in 2015.
“Developers are looking to the Asean market, which has 600 million people. So the developers expect that the number of expatriates as well as the [amount] of foreign direct investment will be increased also,” he said via email.
Mr. Socheat added that a number of major development projects, some still in planning stages, had contributed to the ballooning construction figures.
Hong Leang Y, managing director of the engineering firm Lotus Green Team Co. Ltd., also said that the spike in construction value is being driven by expectations for greater regional connectivity in the coming years.
“Local investors in Cambodia have more money and are putting money in hotels, apartments and residential compounds, especially in Phnom Penh and Siem Reap,” he said. “And for foreign investors, there’s been more investment in tourism resort projects.”
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