To witness the severity of the slowdown in Cambodia’s property market, look no further than the unfinished Camko City.
Cranes have stopped swinging at the Russei Keo district site, and where hundreds of workers just months ago swarmed the 15 unfinished apartment buildings and surrounding streets, there is silence.
Unemployed construction workers said this week that the project had slowed to a stop over the last several months, though an official with Camko City’s developer, World City, said he didn’t know when the slowdown began or when work at the mega housing complex could regain momentum.
The Seoul-based World City began the first phase of its proposed $2-billion, 120-hectare, 6,000-unit city in 2007 during the country’s property boom. Several other so-called “satellite city” projects were spawned from those halcyon investment days two year ago and most now face delays or substantial downsizing of their plans.
“You can see what is going on with the market. So when the market slows down so does construction,” said Kheng Ser, assistant to World City Vice President Duk-kon Kim.
“How could we build something that we cannot find someone to buy. That why there is a slow down,” Mr Ser said.
Striking a more optimistic note, Mr Ser said there is no reason to be doubtful of the project’s eventual completion as his firm has no shortage of funds to get the work done. But when that will be remains the question.
“One day they [the public] may not see much construction work and they think it is going to stop, but they do not know how we manage it,” Mr Ser said, adding that just as the work has slowed it could also be speeded up again.
Around 80 percent of Camko City’s first phase of 1,009 units has been sold, Mr Ser said. Of that number, 182 villas and townhouses will be finished by the end of the year, though Mr Ser said that he did not know whether the more than 800 apartment units which have been sold would be finished next year as was scheduled.
When work will recommence at full speed is a question for the projects’ contractor, Hanil Construction, Mr Ser added. Lim Samnang, the administration manager at Hanil’s Phnom Penh office, said he did not know when construction would resume at previous levels, and referred questions back to World City.
Peou Chroep once worked at Camko City and she still lives across the street from the site. In late May she along with many other workers lost their jobs because of what supervisors described to Mrs Chroep as a shortage of money.
“First they said it was only a one-month delay, then they said it would be two months,” Mrs Chroep said, adding that she may now move back to her home province of Siem Reap as there are no signs yet that works is about to restart.
Mrs Chroep’s husband has a job at the skyscraper project Gold Tower 42, on the corner of Monivong and Sihanouk Boulevards, which is now showing signs of progress in its construction after more than a year of rumors that it might never get off the ground.
Though several dozen workers can still be seen working at Camko City, a supervisor said last week that they were only erecting scaffolding for when full construction work resumes at the site.
The site supervisor, who declined to give his name, said he too didn’t know when work would begin in earnest again.
Though, Mr Ser said he didn’t know how many workers were present at the site, he said that many are focused on finishing Camko’s smaller villas and townhouses.
Several real estate agents said that given the current poor state of the property market in Phnom Penh and elsewhere, the lack of progress at Camko spelled trouble for its future.
Soush Sareoun, managing director of Asia Real Property, said the property market throughout the country is “difficult” and it may take years to recover from the bursting of the bubble that developed of the past few years.
“The market is now not good,” he said.
Siev Sophal, managing director of Time Property, said that without demand there seemed to be no reason to continue construction at Camko City.
“This is a serious problem,” he said, adding that even potential future buyers might now be scared away from Camko City because the building work has slowed, which could make people lose confidence in the project ever being completed.
“When they delay, it dissatisfies clients,” he said.
Sung Bonna, president of Bonna Realty, said that location would likely decide the fate of the satellite cities that were started around Phnom Penh.
Demand for property will eventually pick up again, probably by the end of the year, and those projects that are situated closer to the city center will fare better and sooner than those further out.
“Phnom Penh is still is a very small city [and] the growth of the population is quite fast,” Mr Bonna added.
(Additional reporting by Cheng Sokhorng)