Thursday, 19 June 2008

Cambodian real estate market heated up by S Korean projects

www.chinaview.cn
2008-06-18

By Long Heng, Xia Lin

PHNOM PENH, June 18 (Xinhua) -- South Korean investor GS Engineering and Construction held here Wednesday the ground-breaking ceremony for the construction of its 52-story skyscraper, the tallest one to be built in Cambodia and latest one to stir up the heated market and trigger off mixed comments.

Cambodian Deputy Prime Minister Sok An said at the ceremony that the construction shows the close relations between South Korea and Cambodia and the confidence of foreign investors for Cambodia in its political and economic stability.

"The project will provide hundreds of jobs and contribute to the economic development of our country," he said.

The skyscraper, a model role from the private sector in developing the country, will become the historic building and the tallest in Cambodia and become a center of tourism, culture and engineering. he added.

GS Engineering and Construction, the largest real estate developer in South Korea, will take 45 months to complete the billion-dollar International Finance Complex (IFC) project near the Tonle Bassac River around March 2012, according to a press release.

The 68,461 square meters project includes a 52-story office block, a 32-story residential block with 275 units, an international school and a shopping mall with 1,064 units, it said.

"The plan is to expand business domain not just to architecture and housing, but to a broader area of plant, civil engineering and development," it added.

GS Engineering and Construction president and CEO Kevin Kab Ryul Kim said that the recent interest of the Cambodian government in city development welcomes South Korean company's development projects with advanced technologies like us.

"IFC Phnom Penh projects will open the gates to more South Korean companies entering the Cambodian market," Kim said, adding that with this project, GS will lead the real estate and development market of Cambodia, newly rising in the Indochina peninsula.

The plan is to expand business domain not just architectures and housing, but to a broader areas of plant, civil engineering and development, he added.

Meanwhile, Mu Hion Woo, the developer's Chief of Business Division in Cambodia, told local media earlier last week that the project is not only a business but also a contribution to the development of Cambodia.

"If you want to see the potential of Cambodia, you can see it in this project," he added.

Currently, a second South Korean real estate developer is constructing a 42-story skyscraper of comprehensive functions, namely the Golden Tower, in downtown Phnom Penh and a third one developing a satellite city named Camko in the suburbs.

These South Korean projects will transform the skyline of the capital, as it is now dominated by buildings only four- or five-story high.

And, the GS project seems to compete with the Gold Tower and the Camko City in the ever booming real estate market of Phnom Penh.

The three mega projects are widely considered as new achievements of the Cambodian government led by Prime Minister Hun Sen. People are waiting and want to see them turned into reality.

Chan Sophal, president of the Cambodian Economic Association, expressed concern over the new buildings' inconsistency with the previous style of the city.

"We all welcomed the construction of the highest skyscrapers in Phnom Penh and other places in Cambodia. We also requested for the government to conserve the houses built in the French colonial era," he told Xinhua.

If conservation and development work well with each other in style and construction, Phnom Penh will be a city both modern and classic, more beautiful and with more cultural hints, he said.

In addition, he asserted that these projects has mirrored the confidence of foreign business people in the political and economic stability of the country and will therefore bring in more foreign investors and benefit the local people.

However, Chan Sophal is also worried that skyscrapers can't really meet the market demands.

The skyscrapers have drawn much public attention, because the Cambodians never saw these things before, but in regard of their essential choice, they prefer to live at the ground floor of a house with a garden and some trees.

"Only rich people will buy apartments at the skyscrapers, because the price is unaffordable for most people," he said.

Some wealthy people subscribe to houses at the top floor of these skyscrapers, but they won't live there.

"They buy them for investment. When sold again, there will be profits," he added.

Nov Rathana, general manager of the Gold Tower project, said that his project will finish in May 2011, adding that market competition is a good impetus for developers.

Sung Bonna, director of the Sung Bonna Real Estate Agency, said that house and land are hot topics for the Cambodians now.

"People like to talk about land, house and their prices. Most of them buy land and houses for investment, and expect fat rewards when they sell them out," he said.

According to industry statistics, land and house prices have spiraled in Phnom Penh and neighboring provinces as result of 10 years' stable development of the country. Top villa in downtown Phnom Penh now sells over one million U.S. dollars, 10 times the previous price.

The mega development projects of skyscrapers have just fueled the vogue and drive land and house prices even higher, said Sung Bonna.

"Phnom Penh still has huge land, waiting for us to develop," he added.

Editor: Bi Mingxin

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