Logo of Phnom Penh Post newspaper Phnom Penh Post - Construction down post-Covid

Construction down post-Covid

Content image - Phnom Penh Post
Construction workers at Koh Pich in the capital’s Chamkarmon district last year. Hong Menea

Construction down post-Covid

A total of 1,679 new construction projects were approved nationwide in the first five months of 2022, down by 150 developments or 8.20 per cent year-on-year, even after the government in November moved to allow a broader resumption of socio-economic activity as Covid-19 eased, which fuelled a rebound in trade.

The investment commitment for the projects stood at $952 million, representing a 59.5 per cent drop year-on-year from $2.35 billion. Nearly 90.77 per cent of the projects, or 1,524, were for residential developments, marking a 5.16 per cent drop from 1,607 in January-May 2021, according to the Ministry of Economy and Finance’s Socio-Economic Trends report.

Huy Vanna, secretary-general of advisory firm Housing Development Association of Cambodia (HDAC), told The Post that the Covid-19 crisis not only slowed down or stopped large construction projects, especially those owned by foreign investors, but it also dissuaded players from moving ahead with new developments.

He explained that because investments in construction are long-term commitments that require large amounts of capital, the sector cannot grow as quickly as others. The ongoing impact and uncertainty from Covid will continue to weigh on the construction sector in every country, he predicted.

“The construction sector in Cambodia will not be able to recover in the short term, especially when it comes to large and high-rise buildings owned by foreign investors. Nonetheless, for residential developments invested by locals, progress goes on as normal due to the constant demand,” Vanna said.

He opined that the Cambodian construction sector, especially the large-building segment, would begin to recover in earnest when foreign investor and tourist arrivals return to pre-Covid levels.

ERA Cambodia CEO Khorn Kungkea on July 22 commented that real estate insiders expect to see the strong inflow of foreign direct investment (FDI) within the next six months, which he said would push up demand for condominiums, especially among Chinese buyers.

He commented that the Cambodian condo market, which was historically dominated by foreign buyers, has seen a remarkable increase in local customers amid the middle-class boom witnessed in recent times, and predicted that the trend would accelerate further in the years to come.

“During [these] past four years, the majority of condo buyers via our company are Cambodians aged between 25 and 35 years old, living in Phnom Penh, and Cambodians living abroad, who bought condos as an investment,” Kungkea said.

He sees a significant surge in condo demand down the road, and speculated that Phnom Penh would emerge as a “centre for condominium supply”.

Ministry of Tourism data show that 343,464 foreign visitors arrived in Cambodia over the January-May period, up by 275 per cent year-on-year. The 2021 full-year amount had been just 196,495, falling 85 per cent versus 2020. The Kingdom had registered an all-time high of 6.61 million in 2019.

Global Real Estate Association president Sam Soknoeun remarked that although real estate transactions are “now gradually resuming”, the large-building segment needs more time to stage a meaningful rebound.

Much like Vanna, Soknoeun attributed the stagnation in the segment to the low number of investor and visitor arrivals to the Kingdom compared to the 2018-2019 period, adding that “before deciding to invest in any project, investors always survey the market and the flow of customers thoroughly first”.

In 2021, a total of 4,303 new construction projects were approved nationwide, with cumulative registered capital commitment of nearly $5.334 billion – down by 31.21 per cent year-on-year – representing a total floor area of 12.998 million square metres, Ministry of Land Management, Urban Planning and Construction data shows.


  • Hong Kong firm done buying Coke Cambodia

    Swire Coca-Cola Ltd, a wholly-owned subsidiary of Hong Kong-listed Swire Pacific Ltd, on November 25 announced that it had completed the acquisition of The Coca-Cola Co’s bottling business in Cambodia, as part of its ambitions to expand into the Southeast Asian market. Swire Coca-Cola affirmed

  • Cambodia's Bokator now officially in World Heritage List

    UNESCO has officially inscribed Cambodia’s “Kun Lbokator”, commonly known as Bokator, on the World Heritage List, according to Minister of Culture and Fine Arts Phoeurng Sackona in her brief report to Prime Minister Hun Sen on the night of November 29. Her report, which was

  • NagaWorld union leader arrested at airport after Australia trip

    Chhim Sithar, head of the Labour Rights Supported Union of Khmer Employees at NagaWorld integrated casino resort, was arrested on November 26 at Phnom Penh International Airport and placed in pre-trial detention after returning from a 12-day trip to Australia. Phnom Penh Municipal Court Investigating Judge

  • Sub-Decree approves $30M for mine clearance

    The Cambodian government established the ‘Mine-Free Cambodia 2025 Foundation’, and released an initial budget of $30 million. Based on the progress of the foundation in 2023, 2024 and 2025, more funds will be added from the national budget and other sources. In a sub-decree signed by Prime Minister Hun Sen

  • Two senior GDP officials defect to CPP

    Two senior officials of the Grassroots Democratic Party (GDP) have asked to join the Cambodian People’s Party (CPP), after apparently failing to forge a political alliance in the run-up to the 2023 general election. Yang Saing Koma, chairman of the GDP board, and Lek Sothear,

  • Cambodia's poverty cut in half from 2009 to 2019: World Bank report

    A report published by the World Bank on November 28 states that Cambodia’s national poverty rate fell by almost half between 2009 and 2019, but the Covid-19 pandemic recently reversed some of the poverty reduction progress. Cambodia’s poverty rate dropped from 33.8 to 17.8 per cent over the 10