Interest in “Southern Phnom Penh” has gained substantial traction over the past five years since plans for Hun Sen Boulevard were unveiled, triggering a frenzy of real estate speculation, CBRE Cambodia reported on August 12.
The real estate firm defines “Southern Phnom Penh” as parts of the capital’s southernmost Dangkor and Meanchey districts, along with localities in Kandal province such as Takhmao town and the districts of Kandal Stung and Sa’ang.
Notable infrastructure development projects that have lent to the trend include Hun Sen Boulevard and the new 4F class international airport occupying 2,600ha in Kandal Stung and slightly protruding into Takeo province’s northernmost Bati district.
CBRE Cambodia said: “This area of the city is well positioned to capture a large percentage of future development, fuelled by this infrastructure investment, several new urban areas and nascent industrial activity.
“Through a combination of rising infrastructure development and a relative abundance of affordable land, the area is rapidly positioning itself to become the preeminent location for future growth for all property segments.
“In the transformation of Southern Phnom Penh, the private sector has the chance to effectively transform the development trajectory of the entire city, and in turn the nation of Cambodia.”
Following trends of the wider region, industrial activity is set to rise, as manufacturers seek stable, good value destinations to base themselves.
Lawrence Lennon, associate director of CBRE’s Professional Services team, said: “Observing regional industrial and logistics trends, we’re excited to see how the sector develops.
“Considering the proximity to existing manufacturing hubs, the country’s stable business friendly outlook, and the nation’s rapid expansion of infrastructure, we have an ever-improving foundation to build on.”
Equally, new urban areas in the south have the chance to reinvent the residential and commercial landscapes.
Lennon added: “When working at the larger scale, if developers take note of the success stories from around the region, they have the chance to achieve something really special – transforming the city.”
CBRE Cambodia noted that there are 54 completed landed residential projects in Dangkor, Meanchey, Kandal Stung and Takhmao, and another 30 under construction.
“High-rise residential developments [have] also entered the southern districts as the market develops. Three condominium projects, totalling to 1,048 units have been completed. In [the] future, the area is also expecting over 3,600 units to be added to the supply pipeline by 2023.
“In terms of the type of projects, the south has attracted multiple upper, mid and affordable projects. Closer to the CBD [central business district] exist high-rise developments, further south, a large majority of developments are low-rise – particularly along Hun Sen Boulevard.
“This growth is attracting a variety of potential investment, as illustrated by ING City, one of the most ambitious development projects in Cambodia. This new urban area, encompassing 2,500ha, is drawing in investment projects in sectors including industrial, residential, and commercial. This momentum is driving land prices upward,” it said.
A CBRE Cambodia study found that Dangkor houses the most affordable housing projects at 56 per cent, while Meanchey has the most mid-range developments at 52 per cent.
It suggested that a surge in affordable projects in Kandal Stung signals “an overall increased awareness among domestic and international developers where domestic demand lies”.
Kim Kinkesa, senior manager of research and consulting at CBRE Cambodia, recommended developers “properly consider where true demand lies when planning the early stages of your project”.
“The south presents a blank canvas for both domestic and international developers, we hope to guide these groups to make the best-informed choices for their projects,” she said.
CBRE Cambodia stressed that master-planned urban zones with defined residential, commercial and industrial areas are expected and required for Southern Phnom Penh.