A 387-hectare, $3 billion proposed real estate development on Phnom Penh’s Chroy Changva peninsula—which includes a 60-hectare public park and a 40-hectare sports facility along with commercial and residential areas—is being planned by the Overseas Cambodian Investment Corporation.
Dubbed “Chruy Changva City, City of the Future,” the project would be located north of the Japanese Friendship Bridge and is to take 15 years to complete in phases, said Touch Samnang, project manager for OCIC, which is owned by most of the same investors as Canadia Bank. OCIC submitted a draft of the project Thursday to City Hall.
“The project has potential. It is in a good location for the future, and companies have enough budget to develop this area,” he said, adding that the project would not begin until after the municipality settles land claims by residents currently living there.
“The City Hall will solve the problem for the company first, because this land belongs to the government, and the people who live there are illegal,” Mr Samnang said. He also said the company bought the lease for the property from developer Sunway City Cambodia Ltd for an undisclosed sum.
The project is one of the first billion-dollar projects to be proposed since the start of the financial crisis in 2008, which set into motion the bursting of the country’s real estate bubble and the delaying or collapse of several ambitious development projects. The South Korean project Star River broke ground in 2010, but it has since been stalled.
OCIC will submit a master plan within a month to the municipality, the Land Management Ministry and the Council for the Development of Cambodia, Mr Samnang said.
Though the final design is not complete, according to materials provided by OCIC, the new city would contain a shopping center, condominiums, a historical museum, a viewing tower and a convention hall, as well as a large sports facility dubbed “Olympic Stadium.”
Chruy Changva City is just the latest major project being planned by OCIC. It has already committed itself to building, at an undetermined time, the world’s second-tallest building, the Diamond Tower, a 555-meter lotus-shaped skyscraper on its Diamond Island City development on Koh Pich island.
OCIC can already lay claim to the largest completed building in the country, the 28-story Canadia Tower.
Still, even with a rebound in the property market, some question the viability of such an undertaking and the demand for mega projects in general.
Sung Bonna, president of the National Valuers Association of Cambodia, said that although other projects have failed, the financial strength of the developer, the location of a project and good planning were essential to success, pointing to OCIC’s successful construction of Canadia Tower.
While the property market is still sluggish, he said that now is a good time to begin planning in anticipation of improvements.
“The real developers, they are still committed; they are the real developer so they don’t care, so they are moving ahead,” he said. “The climate will be better and better soon.”
However, Sunny Soo, country head of the property consultancy Knight Frank, said he had doubts about any large projects in Cambodia. Even after the reductions due to the economic crisis, he said, land continues to be overpriced and that will hurt developers.
“The land is still too expensive. There is not doubt about it. I wonder how long this market will continue,” he said, adding that he had spoken to investors still skeptical of asking prices in Phnom Penh.
“Even if everybody is being very positive about the economy, the property market might continue to stagnate.”
The project would also set the stage for what could be another series of protests from displaced residents, a perpetual issue for the municipality and private sector.
Sia Phearum, director of the Housing Rights Task Force, raised concerns about the municipality’s track record of not respecting the property rights of residents in development areas. He cited Boeng Kak lake, which will ultimately result in the eviction of 4,000 families, as an example.
“The first suggestion would be for the municipality to respect the housing right and the human rights,” he said.
Keut Chhe, deputy Cabinet chief of Phnom Penh municipality, defended the government’s handling of development projects but said it was too early to discuss compensation, as the municipality had only received initial plans on Thursday. Though the municipality will only make a recommendation, the government gives full consideration to all projects.
“Generally, we look critically into the project for a long time before sending them to the CDC for approval,” he said.
(Additional reporting by Kuch Naren)