Workers at the construction site of a new mega interchange spanning three boulevards in Phnom Penh’s Meanchey district on June 13. Heng Chivoan
Cambodia has given the green light to 2,367 construction investment projects during the initial eight months of 2023, marking a 20% drop compared to the same period last year, as reported by the Ministry of Economy and Finance.
According to its data covering January to August, the Ministry of Land Management, Urban Planning and Construction has overseen the approval of the projects, encompassing 11.6 million square metres of space and a capital investment of $4.757 billion.
In comparison to the first eight months of 2022, the number of projects has decreased by 444. However, construction space and costs have surged by 184% and 186%, respectively.
A total of 331 construction projects secured permits in August, occupying 3.6 million sqm and attracting $1.557 billion in investment. This represents a month-on-month increase of 114 projects (43%) compared to July. Construction area and capital investment rose substantially from July to August by 201% and 254%, respectively.
When contrasted with August 2022, the number of construction projects decreased by 69 (17%), while construction area and capital investment soared by 438% and 538%, respectively.
The projects approved in August encompassed 247 housing projects (including 225 gated-communities, known locally as borey) and 32 and 33 industrial and commercial buildings, respectively. Eight tourism and public construction projects each, as well as three investment projects, were also sanctioned.
“In the context of this ‘new normal’, the trend of Cambodia’s construction sector is recovering. Although the number of projects has decreased, the size of the area and capital investment in construction show numerous positive signs, indicating that the most recent projects are large-scale developments,” stated the finance ministry.
Chiv Sivpheng, general manager of the Cambodia Constructors Association (CCA), told The Post that after a sharp decline during the Covid-19 outbreak, the country’s construction sector is gradually displaying positive signs. This includes both new construction sites and progress on existing projects.
He noted that local investors are playing a more significant role than before, with a shift away from foreign investors.
“The favourable geographical location and investment-friendly laws are key drivers attracting local and foreign investors to Cambodia. The construction sector plays a vital role in driving national economic growth,” he said.
Land management minister Say Samal held an October 16 meeting to prepare for the 19th Royal Government-Private Sector Forum scheduled for November. The meeting brought together leaders and relevant officials from the ministry and representatives of the Housing Development Association of Cambodia, the CCA and the Cambodia Microfinance Association (CMA), along with other stakeholders.
The purpose of the meeting was to review, discuss and address challenges related to the construction and real estate sectors.
For reference, the finance ministry’s report stated that in 2022, the land management ministry approved a total of 4,275 projects, representing a decrease of 28 projects compared to 2021. The total capital investment for these projects amounted to $2.968 billion, marking a 46.8% decrease.
Among these projects, 3,768 were residential, constituting 88.1% of all construction requests, representing an increase of 48 projects compared to the same period in 2021, including commercial, industrial, tourism and other project types.
