Logo of Phnom Penh Post newspaper Phnom Penh Post - Construction sector sees 20% fall

Construction sector sees 20% fall

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One Park Condominium, a project developed by Graticity Real Estate Development Co Ltd, is under construction in the capital’s Boeung Kak area in May. Hong Menea

Construction sector sees 20% fall

The Kingdom’s construction sector has seen a 20 per cent fall in capital investment this year compared to last year, while the government collected nearly $100 million in national revenue from real estate services, according to the Ministry of Land Management, Urban Planning and Construction’s 2018 annual report released on Monday.

According to the report, a total of 2,867 projects were approved this year valued at more than $5.22 billion, down 18.66 per cent compared to $6.42 billion last year. The report showed the number of investment projects approved last year was 3,052.

Despite the decrease in capital investment, the ministry collected more than $97.6 million in revenue, an increase from $93 million last year.

The report said the revenue collected was comprised of approximately $11.5 million in cadastral services, $4.05 million in construction service fees, $70,000 in revenue from enterprise and factory site rental and $81.9 million in property transfer taxes.

Minister of Land Management, Urban Planning and Construction Chea Sophara, who participated in the meeting on Monday, said the ministry had improved efforts this year to ensure the Kingdom’s management of the construction sector remained efficient and safe.

He said that the construction sector greatly boosted national economic growth, strengthened land safety and management, as well as promoted housing development to create a favourable environment for business, investment and economic development.

Although investment capital in the construction sector declined this year, insiders remain optimistic that investment capital will increase next year as many large developers are currently preparing to apply for construction permits.

Khmer Foundation Appraisals president and CEO Noun Rithy told The Post on Monday that capital investment will recover next year because the political situation and economic growth in Cambodia have shown steady positive signs since the national elections.

“The [value] in the construction sector will recover, because I know that many developers are preparing to apply for construction permits in 2019,” he said.

Century 21 Mekong Co Ltd CEO Chrek Soknim said the slump this year was due to large projects approved last year, which are currently under construction and are set to take two to three years to complete.

“When those projects are completed, there will be more projects built. 2018 is the period of construction,” Soknim said.

Emerging Markets Consulting senior consultant Ngeth Chou, who also works in the property sector, said the drop in capital investment this year could be attributed to two factors – a large volume of projects approved last year and investor hesitation during the July election.

“I know of some developers that were reluctant to develop their projects in 2018 due to the elections, resulting in the decline,” he said.

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