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Foreign investment flows into the PP market

2020-07-06
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Summary:From January to May this year, Phnom Penh attracted a total of 583 construction investment projects, involving a construction area of 281,317 square meters, with a total investment of 1.375 billion US dollars.

Affected by the epidemic, Cambodia’s pillar industries were hit severely in the first half of this year, especially in tourism, services and manufacturing industry. Recently, the Royal Government of Cambodia also made its first economic forecast report, predicting that Cambodia’s economic growth rate in 2020 will be unprecedented -1.9%.

In the context of the continued downturn in various economic sectors, the real estate sector has also been affected to a certain extent, but compared with the construction market, the project investment has not yet shown a significant downward trend.

Phnom Penh's Director of Land Planning and Construction, Sulan Vanna, attended the press conference on the 16th and said that from January to May this year, Phnom Penh attracted a total of 583 construction investment projects, involving a construction area of 281,317 square meters, with a total investment of approximately 1.375 billion U.S. dollars.

Sulan Vanna revealed that the market investment enthusiasm and project approval rate in the first quarter of this year continued to increase, and the investment amount increased by 43% compared with the same period last year. There is no clearer trend in the second quarter, but the impact of the epidemic on various fields in Cambodia may be evident in the second quarter.

In the context of the global economic shrink, Phnom Penh still attracted 583 construction investment projects in the first five months. Even though a small number of overseas investment projects have been affected, the overall situation has stabilized, and foreign capital is still optimistic about the market prospects of Phnom Penh.

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High-speed economic development, improved urban vitality, Phnom Penh investment market has great potential

Phnom Penh is located on the banks of the Mekong River and can fly to various countries in Southeast Asia within 2.5 hours. It has an extremely important strategic position. Phnom Penh, with domestic capital gathers and foreign capital to flow in continually,Phnom Penh is a core city with great potential in the ASEAN region. The real estate market has a broad development space, and the investment fever will not be cool down due to the epidemic.

In terms of internal environment, Phnom Penh's political and commercial economy is prosperous and the rapid development of a diversified economy has laid the foundation for project development.

Phnom Penh is the capital of Cambodia and the city with the most dense population in Cambodia. The young demographic dividend supports the future real estate market. The initial urbanization is very beneficial for investors to invest in real estate projects in Phnom Penh.

Phnom Penh is also an international city with a population of hundreds of thousands of foreign residents. The proportion of foreigners is about 20%. There are 1 foreigner among 5 people on the street, plus nearly 30 national embassies and a large number of multinational companies. Get together in Phnom Penh, the city's spending power and tolerance are very strong.

The highly integrated market environment has made the rental and sales market in Phnom Penh very active, and the return on investment has been rising all the way, further the market driving the development of the real estate market, urban development, and investment projects.

At present, construction projects in Phnom Penh are not limited to the core business district. Driven by urban expansion and market demand, Phnom Penh's urban development is expanding to the outskirt constantly. Many new developmen are located on the outskirts of the city, including the development of Kandal Province, which is close to Phnom Penh. The speed is very fast, and the vitality of Phnom Penh's cannot be underestimated.

But it is worth noting that Cambodia is highly dependent on foreign capital. Under the circumstances of the global economy, Cambodia’s investment and construction will be affected. The impact of construction investment may be more clear after the end of the second quarter. The future’s trend  depends on the recovery of the global economy.

Overall, Phnom Penh's economic resilience is still the strongest among the major cities in Cambodia, and its risks resistance ability are higher than other cities. Even though the epidemic is raging, construction investment and construction in Phnom Penh are still proceeding steadily. With the improvement of the epidemic situation and the recovery of economic activities, the construction market and housing market in Phnom Penh will warm up slowly.

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