South Korea’s Booyoung Group broke ground Tuesday on a $1.1 billion satellite city in Sen Sok district along Russian Boulevard, the second such development to break ground in Phnom Penh in the past month.
The satellite city, to be called Booyoung Town I, will cover 23.5 hectares in Toek Thla commune.
Minister of Land Management Im Chhun Lim said in a speech at the groundbreaking that the project would include commercial buildings, luxury houses, a sports center and a school.
“This is a significant contribution to boost economic growth and development in [the] construction sector, urbanization and real estate in Cambodia,” Mr. Lim said.
Mr. Lim, however, did not provide any details on how much Booyoung Group had bought the land for or who owned the land in the past.
The development is the first South Korean property firm to invest in such a large property development since CamKo City, another South Korean satellite development, worth $2 billion, ran into difficulties on the back of accusations that its lead investor, Busan Savings Bank, was engaged in illicitly using deposited funds for business deals in South Korea and overseas.
Grand Phnom Penh International City in Sen Sok district and a host of other satellite cities—including CPP Senator Ly Yong Phat’s Garden City development, which broke ground last month—are currently under construction in Phnom Penh and slowly filling up.
Sung Bonna, president and CEO of Bonna Realty, said that Booyoung Group was in possession of a prime piece of real estate, but that it remained to be seen how much demand there would be for the development.
“For a satellite city, it’s a prime location because it’s close to the airport and in the heart of a high-density population area,” Mr. Bonna said, adding that he had not yet seen the plans.
“Of course, it would have to be well prepared and it needs good construction, but if it’s well done, it could be the best” in an increasingly competitive market, he added.