Eight years after CPP Senator Lao Meng Khin signed off on a 99-year lease of Boeng Kak lake in one of the most controversial real estate deals in Phnom Penh’s recent history, a Chinese firm has begun construction on the first major development project on the filled-in lake.
Beijing-based Graticity Real Estate Development company started construction last month on One Park, a commercial and residential development billed as “Sophisticated Urban Living” after purchasing 20 hectares from Shukaku, Mr. Meng Khin’s firm, according to Hong Xin, customer manager for Graticity.
“One Park is our first investment project in Cambodia,” Mr. Hong said on Tuesday. “We have 20 hectares [in the Boeng Kak area]. Currently, we are developing phase one on 7.9 hectares, which will be flats and condos. Phase two will include a five-star hotel, shopping mall, high rise offices.”
Mr. Hong said Graticity had entered into a partnership with Shukaku to develop the site, paying $2,500 per square meter of land on the former lake.
Amu Pillay, a spokeswoman for Shukaku, declined to discuss the development.
“Please note that we’re not agreeing or denying any of the information given by Graticity,” she said in an email Wednesday. “We’re merely reserving our comments.”
Phnom Penh City Center (PPCC), the name Shukaku has given to its grand development plan for the lake, has already begun building an office, showroom, roads and drainage infrastructure on the filled-in lake.
One Park, however, is the first sign that the upscale urban development initially envisioned for the area may actually take shape.
Mr. Hong said the majority of the condos in the initial six-story residential building, the frame of which already rises above the mostly barren development site, have already been sold. And he said he was confident that the fierce protests that followed the eviction of thousands of families from the area around the lake following its sale to Shukaku had subsided for good.
“We haven’t had to advertise, and we have still sold over 90 percent of the flats already, so we are confident that there is a market for such properties at Boeng Kak, and it shows that people must feel the protests are over,” Mr. Hong said.
“For the flats, most of the [buyers] have been Cambodians, as they have ID cards and are able to purchase easily,” he added. “As this is our first project in Cambodia, we don’t know what the target market for the condos will be yet, but we imagine they will be popular with foreigners: Chinese, Taiwanese and Singaporeans.”
Six-story apartments range from $450,000 to $750,000, Mr. Hong said, adding that Graticity planned to have tenants move into their units by the end of 2017. No date has been set for the completion of the buildings that will house 1,300 condos as part of the project’s second phase, he said.
Plans for the Boeng Kak area have been controversial from the start, and Shukaku has struggled to get development off the ground.
In 2011, the World Bank put a hold on all new lending to the country in protest of the government’s forced eviction of some 3,000 families from around the lake. Evicted residents, along with their neighbors, have expanded their activism beyond the lake, becoming some of the most high-profile protesters in the country and lending their voice to a variety of causes.
A joint venture between Shukaku and Chinese firm Erdos Hongjun Investment Corporation, which began in 2010, fell apart in 2014. In June last year, Singapore’s HLH Group announced that it was planning to purchase land in the area, but called off their $14.9 million agreement with Shukaku in December, citing “commercial reasons.”
HLH claimed at the time that it knew nothing about the evictions and subsequent protests at the site. Mr. Hong of Graticity said he was confident that lingering discontent would not affect his firm’s project.
“HLH didn’t succeed due to the protests at the time. Hun Sen declared in April that the land dispute had been solved, so we came here to invest,” he said. “Now, a lot of companies are interested in the lake, and there haven’t been any more disputes, so everything appears to be OK.”
However, Yorm Bopha, a leading member of the Boeng Kak protesters, said that a group of activists demonstrated in front of the One Park construction site last month.
“Fifty people from the Boeng Kak community protested outside the company [land] and we demanded that they stop construction and wait for a solution first, but they did not listen to us,” she said.
“If there is no solution for the people in the Boeng Kak area, we will continue to protest.”