The construction and real estate sector in Preah Sihanouk province is expected to see a gradual recovery, as the government implements various policies to attract investors and tourists, aiming to revive the province’s business and economic activities to their pre-2020 levels.

Status of the construction sector Long Dimanche, Preah Sihanouk’s provincial deputy governor, told The Post that over 1,000 buildings in the province are considered high-rise. Some of these are operational, while others are either in the planning stages or partially completed. 

The government, through the Ministry of Economy and Finance, is leading efforts with provincial authorities to address unfinished construction, offering incentives and tax policies to ensure these projects are finished.

“Currently, the relevant authorities are striving to stimulate investment and re-establish the market. New markets can propel building activities forward. The presence of unfinished construction indicates a loss of market share. Therefore, it is imperative to create a market and establish incentive policies, involving the private sector. The engagement of all stakeholders is crucial to revitalise the market,” he said.

“If the initiative progresses in accordance with Preah Sihanouk [development plan], which envisages a model multi-purpose Special Economic Zone (SEZ), it will enhance the area’s appeal to investors,” he added.

He said that the approach should draw both Cambodian and international investors, vital for rejuvenating the province’s economy. As a key entry point to Cambodia, this development has the potential to benefit the entire nation’s economic progress.

He noted that over 170 buildings in the province have been completed but are not yet functional, and there are more than 360 ongoing projects.

The country’s real estate market situation Im Seng Hour, branch manager of Century 21 Zillion Holding in Sihanoukville, noted a resurgence in foreign investment, particularly from Indonesian and Chinese investors. The renewed interest is reviving some construction sites inactive for over three years, spurred by growing demand for rental spaces for businesses. However, he observed that the market remains relatively quiet.

“In recent months, I’ve noticed buildings abandoned for the last two to three years are being reconstructed, driven by a rising demand for rentals. This uptick, particularly from Indonesian and Chinese investors, spans both accommodation and business venues,” he said.

He said that real estate prices in Sihanoukville’s prime areas, stretching from Ochheuteal Beach to Otres, currently range between $2,500 and $3,500 per sqm. In the suburbs, prices start from $150 upwards. 

He explained that these rates have seen a slight decline since the beginning of 2023, primarily due to a surplus of sellers over buyers. At this point, individuals indebted to banks or investment partners are actively seeking to sell their properties.

“Towards the end of 2023 and into 2024, I don’t foresee any significant improvement in the real estate buying or selling market in Preah Sihanouk compared to early 2023. However, there could be more positive signs from 2025 onwards. The rental market, on the other hand, should continue to expand,” he said.

He noted that before 2019, when the real estate market in the province was flourishing, prime locations could fetch as much as $5,500 to $6,000 per sqm.

Government policy Hean Sahip, secretary of state at the ministry and chairman of the Working Group on Resolving Unfinished Investment Projects in Preah Sihanouk Province, announced at an October 31 workshop that the government has introduced measures to address unfinished investment projects. 

These measures, based on ensuring completion of buildings and enabling their use, are part of the Pentagonal Strategy - Phase 1, aimed at transforming the province into a diverse economic zone.

“Preah Sihanouk is a province that receives high priority from the government. It is home to numerous buildings valued at over $1 billion, which require attention to enhance economic and business activity. The goal is to transition from past stagnation to a dynamic present and future,” he said.

He explained that the strategy to address unfinished projects involves comprehensive ‘package measures’. These will be implemented collaboratively by relevant ministries and institutions, driven by a strong commitment and proactive approach. 

He said the focus is on attracting investors and tourists, stimulating market demand, reducing the number of unfinished projects and reinvigorating economic activity, and that the successful execution of these plans necessitates the involvement of all stakeholders.

The Kingdom’s construction sector witnessed substantial recovery in 2023. 

The Ministry of Land Management, Urban Planning and Construction approved 826 investment projects worth $1.5 billion in the second quarter of 2023, a 130.2% increase in capital investment over the same period in 2022. 

Housing construction projects dominated these investments, followed by industrial, commercial, public and tourism-related construction.

In June 2023 alone, there was a 20.3% increase in approved projects, with capital investments rising by 92.1% to $440.4 million, as per the finance ministry.