The value of approved commercial construction projects more than doubled to $7.2 billion in the first eight months of the year, driven by a building boom in Phnom Penh and the clearance of an application backlog, an official said.
Weakness in residential projects, specifically the condominium sector, has been a drag on the industry, according to the Finance Ministry, but overall growth has continued due to larger multi-use projects in the capital, said Seng Lot, a spokesman for the Ministry of Land Management, Urban Planning and Construction.
In its latest report on the construction sector, the ministry said it approved 1,753 projects worth $7.2 billion in the first eight months of this year, compared to 2,305 projects worth $3.3 billion in all of last year.
Approval of the 133-story Thai Boon Roong Twin Towers, a mixed-use megaproject on the site of Phnom Penh’s former Dream Land amusement park, anchored the figure, Mr. Lot said.
The $1 billion trade center, announced earlier this year by the local Thai Boon Roong Group and Chinese contractor Kia Nip Group, is to feature office space, a cultural center, a hotel and shops on a five-hectare plot.
Another contributor was the approval of dozens of projects that had been stuck in the Land Management Ministry’s pipeline, Mr. Lot said.
“It is also due to the clearance of a backlog of almost 100 building projects that the new minister, Chea Sophara, approved since he came to the office,” he said.
Investor confidence in the country’s steady economic growth and relative political stability also contributed to the $7.2 billion figure, led by developers from China, South Korea and Japan, Mr. Lot said. Between 2000 and August of this year, foreign investment in 284 projects totaled $4.2 billion, he said.
Condominium sales plummeted by 50 percent in the first six months of the year, while sales of units in gated communities dropped by 30 percent, a result of excess supply, the Finance Ministry said in a report released last month.
The World Bank expects Cambodia’s gross domestic product to grow by 6.9 percent this year, with the country’s building boom continuing to bolster the economy.
“Construction remained a main engine of growth in 2015, driven by sustained foreign direct investment into the sector,” the Bank said in an April report. This year, it said, construction is expected “to continue to be a major engine of growth.”