Value of Approved Construction Projects Soars

The value of construction projects approved by the government during the first nine months of the year reached $1.83 billion, an 83.61 percent increase compared to the same period in 2011, according to data released yesterday by the Ministry of Land Management.

A view of Independence Monument from Sihanouk Boulevard. (David Murphy)

Tith Khemra, director of the construction department at the ministry, said that the value of approved developments this year soared past the $999.3 million worth of projects posted during the first nine months last year. However, the number of approvals actually decreased 19.65 percent to 1,357, a sign that the projects being approved are more at the higher end of the market.

“We are seeing that projects are getting bigger, especially for residential buildings in Phnom Penh,” he said. “We are also seeing more construction of factory buildings, especially in provinces that border with Phnom Penh such as Kandal and Kompong Speu.”

He added that a number of towers and large residential properties on Koh Pich in Phnom Penh were among some of the approved projects so far this year

Other approvals that helped increase the value included large retail developments such as the 68,400-square-meter high-end shopping complex being built by Japan’s Aeon Mall Co. Ltd. on Sothearos Boulevard. The project is set to break ground next month. Another shopping center currently being built by Malaysia’s Parkson Corporation Sdn. Bhd. near the U.S. Embassy was also approved.

Rainer Israel, director of the engineering firm Consulting Engineers Mekong, said that the revival of the property market since the global economic crisis in 2009 has seen a gradual shift from small locally-owned projects to larger scale ones as demand for better quality real estate is growing.

“What is happening now is that there are more top-quality projects that simply require more funding to build,” he said. “The costs for quality engineering, for example, is a lot, but it can also help you save lots of money. A lot of developers are also installing things like basements here for the first time, so there is an expense for that associated with learning costs.”

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