Capital investment in newly-approved construction projects over the first nine months of 2021 reached $4.657 billion, dropping by nearly 21 per cent year-on-year from $5.868 billion, chiefly as a consequence of Covid-19-related travel restrictions around the world.

The Ministry of Land Management, Urban Planning and Construction greenlit 3,263 construction projects in January-September, falling by 12.73 per cent or 476 projects from the year-ago period, the Ministry of Economy and Economy reported.

The data show that 2,909 projects were residential developments, dipping by 10.57 per cent or 344 projects year-on-year.

Cambodia Constructors Association general manager and secretary Chiv Sivpheng blamed the declines on cross-border travel restrictions, which he said prevented foreign investors from entering the Kingdom in pursuit of investment opportunities.

He told The Post on December 22 that there had been a noticeable uptrend in construction activity and investment feasibility studies since the government in mid-November relaxed travel rules for tourists and investors who have been fully vaccinated against the novel coronavirus.

“The Covid-19 epidemic has disrupted activity in almost all areas, including construction. The amount of capital investment and the number of projects fell, due mostly to developments invested by foreigners,” he said, underscoring that new locally-invested projects were generally advancing at normal pace.

He voiced optimism that the Cambodian construction sector would begin to recover in earnest from the beginning of 2022, saying the soon-to-be-enacted investment law would motivate domestic and foreign investors to inject capital in all sectors.

Huy Vanna, secretary-general of advisory firm Housing Development Association of Cambodia (HDAC), acknowledged that Covid had led to a steady decline in the number of new foreign-owned large-scale construction projects.

He stressed that progress on foreign-invested construction projects is more susceptible to the global situation with respect to Covid than locally-owned borey gated communities and other residential developments, which he said saw no major problems.

“The declining figures for the construction sector are due to a slowdown of large-scale foreign-invested projects, but local developments are going well as normal,” Vanna said.

Lucky Realty CEO Dith Channa said the construction and real estate sectors in Cambodia are gradually recovering after “a brief lull”, also pointing out that the majority of new projects are locally-invested.

The sector will become all the more robust as the world economy strengthens, especially once Covid-19 can be completely controlled in every country, he said.

A healthy real estate market means a healthy construction sector, Channa said. “The real estate market is dynamic, it will be the driving force behind the simultaneous recovery of the construction sector.”

The construction ministry said it approved just $7.8 billion in new construction projects last year, down by 32.1 per cent from $11.4 billion in 2019.