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What are the key roles of a master plan in the real estate sector?

2022-05-04
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Summary:For what purpose does the government create a master plan? What is the impact of the master plan on the real estate sector?

    Although Cambodia was under French colonial, there was a master plan for Phnom Penh that was arranged many times until the Sangkum Reastr Niyum era, a glorious period under His Majesty the King Norodom Sihanouk. But the peace in Cambodia at that time did not last long, Cambodia fell into the flames of war again until it fell under Democratic Kampuchea (Genocidal regime) for 3 years, 8 months, and 20 days which is leading Cambodia's economy to zero. After the day of liberation on January 7, 1979, Cambodia was still affected by small wars. Since the end of the civil war in 1998, the Royal Government has been working to restore the country's economy from one stage to another. In the work of rebuilding the nation, the government also continues to take the existing master plan and reorganize it during the win-win political era under the wise leadership of Samdech Techo Hun Sen, the Prime Minister of Cambodia.

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Did you know that from 1998 to the present, which areas are the target of the master plan and which areas will be in Phnom Penh in the future?

    To better understand the master plan, Compass would like to show what is the meaning of a master plan or land use plan? A masterplan is a blueprint for a common vision and strategy for physical development and identification of land use types, as well as an outline of cities, urban infrastructure, major urban transport, and integration.

The master plan must be accompanied by short-term, medium-term, and long-term urban development plans.  

* Government plan

    Based on the Rectangular Strategy Phase 3, the National Strategic Development Plan, and the National Policy on Land Management of the Royal Government of Cambodia. The confluence of the Four Rivers, also known as the Four Rivers, is a unique identity, a center of politics, economy, trade, culture, with potential for competitive development, equity, and sustainability, and as the home of more than 2 million Cambodians (statistics in 2019) and a large number of foreigners, Phnom Penh has become a priority area to get the most out of the master plan.

* Purpose of the master plan

The Government, through the Ministry of Land Management, Urban Planning and Construction, has been preparing land-use master plans for all capitals and provinces in 2035 in keeping with the strategic document serving the ambitions of the Royal Government and the goals and vision to 2035 in managing the direction of economic development in the administrative boundaries of the capital, provinces, and the surrounding urban areas to respond to the growth of private investment and population through the orientation and promotion of public investment in line with the free market economy and the development of sub-national democracy.

In the opinion of some real estate experts, it is convenient when investors want to buy developing land in a city that can be used or build a few storeys high and it is the best and most beneficial for investors and real estate investors, ordinary people and the government, in particular, to be able to control the areas where the government has a strategy for urban planning and easy to organize infrastructure as well.

* Areas in the current master plan    

    Areas in Phnom Penh are all important areas and can not be missed, but the development depends on the geographical area and the actual situation of those areas. In fact, the documents confirm that the four old districts of Phnom Penh, including Chamkarmon, Khan 7 Makara, Khan Daun Penh, and Khan Toul Kork, have been developed since previous times, including the construction permit infrastructure is also divided into residential areas and commercial. For some reason, these locations are downtown in the center of Phnom Penh, easy to travel and surrounded by many important places. Because of this pattern, many investors have located their projects in those areas, which has led to higher average prices for real estate, including land, houses, apartments, condominiums, and other types of real estate in these old areas among the 14 districts.

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Later, we observed that Sen Sok district also followed the principles of the master plan. Recently, Sen Sok district of Phnom Penh is gradually becoming a good residential development area, and its supply will be more than 20% of Phnom Penh's total supply in 2021 in the increased residential area. This will increase business activity in the area and will increase property prices for investors and owners. According to data from a real estate company in Sen Sok district, land prices in the district range from $150 to $4,000 per square meter, and prices vary depending on the actual location. In fact, the local retail market is growing year by year, which could turn this area into a potential business hub as well.

For the future, the development in Chroy Changvar district is moving fast and in line with the master plan of the Phnom Penh Capital Administration, which encourages this Chroy Changvar district to become a high-class residential area of modern nobility without clusters, factories, enterprises, or warehouse. Currently, after Phnom Penh, the old city, Chroy Changvar, which is a potential area and is attracting a lot of investment, now there are already some satellite city projects, such as the satellite city project of OCIC and the city satellite city, Ly Yong Phat, along with the fact that the ring road is also located in Chroy Changvar district. Chroy Changvar is classified as a residential area in the Phnom Penh Development Plan 2015 2030, which was approved in 2015 by the Head of Government.

Looking back at Dangkor district, the Royal Government has decided to cut some areas of Takhmao City, Kandal Province, 302 hectares under the jurisdiction of the Phnom Penh Capital Administration to address and facilitate the implementation of the master plan for the development of Boeung Tumpun and Boeung Choeung Ek satellite cities, as well as to the administration and administration of public services.

* Property prices in Phnom Penh

    We notice that because the master plan is organized, the construction of condominium projects is easy to estimate. Khan Chamkar Mon, Boeung Keng Kang, and Khan Daun Penh, the top districts of Phnom Penh, have famous projects there, such as Prince Happiness Plaza, Wonder Mesong, and Prince Huan Yu Center, and other luxury projects with an average price of $2,600 to $3,500. With the small area but the prime location of Phnom Penh, 7 Makara district is also full of high-end projects, especially the Olympia City project, which is not only a type of housing, the project has built a shopping mall in the community, which is easy to shop and clothing. In addition, the project also has shophouses and the financial street that is easy to do business. Aside from above international community, there are other condominium projects including Sky Villa, Baoli Mansion, Dingli Building, CEO KT Pacific, and also Sky Line with an average price of $2,000 to $3,500 per square meter. Returning to developing districts such as Chroy Changvar, there are currently planned and under construction projects such as Morgan EnMaison, The Peninsula, Wealth Mansion, La Vista One, Morgan Park Villa, etc., which are all Riverside projects in natural locations that cost from $2,100 to $3,500 per square meter (average).

    Due to the steady growth of Cambodia combined with the preparation of a master plan to document all investors, the master plan also covers the value of a large portion of real estate. Urban development plans have been issued and major projects are under construction. When most plans are implemented, housing prices in the area will increase spontaneously. Furthermore, new entrants in the real estate sector, whether for self-employment or investment, should review the master plan in detail to increase the potential of your investment and you also have less difficulty in buying land for construction or construction not in accordance with the law that states this situation is to facilitate a lot of time. For easier, you can contact Compass Real Estate to discuss your real estate investment via + 855(0) 81 35 54 14, + 855(0) 17 65 68 57.

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Disclaimer: The re-forward articles on Compass website are for the purpose of conveying more information, and it does not mean that the Compass website agrees with its views or confirms the authenticity of its content. Article noted as "Source: Compass original", please note that the source from Compass. The content of the article is for reference only and should not consider as investment advice, and it does not mean that Compass agree with its views.

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