South Korean firm GS Engineering and Construction broke ground Wednesday on a $1 billion complex in Phnom Penh’s Chamkarmon district that will contain a 52-story office block-the country’s tallest building.
The International Finance Complex, located on a 6.8-hectare site near the Russian Embassy on Sothearos Boulevard, will contain 1,064 residential units in six towers, ranging in height from 46 to 51 stories. There will also be a 34-story service apartment building, a school, and other facilities.
GS E&C CEO Kevin Kim said in a statement at the groundbreaking ceremony, which was attended by Cabinet Minister Sok An, that the IFC will be completed by March 2012.
GS E&C, which is solely financing the project, has 19 branches in 28 counties with more than 300 construction sites and was ranked first among South Korean construction companies in sales in 2005 and 2006, according to the company’s plans submitted to the Council for the Development of Cambodia.
“The start of the IFC Phnom Penh Project is our viable achievement of finding a new growth engine after Vietnam,” Kevin Kim said at the ceremony. GS E&C is currently developing a 17,000-unit resident complex in the suburbs of Ho Chi Minh City, which has in recent years experienced a massive real estate boom.
While questions have circulated regarding the feasibility of some of the large real estate developments in Phnom Penh, GS E&C general manager in Cambodia Kwon Suk-joo said the lack of office space and high-end housing would assure the project’s success.
“We think there is abundant demand for intelligent buildings like our project,” he said after the ceremony. “The demand is high but the supply is very limited.”
Kwon Suk-joo said that sales prices have not yet been determined but that unit prices will be comparable to Gold Tower 42, the other South Korean high-rise development planned for Phnom Penh.
Gold Tower, a 42-story project at the corners of Monivong and Sihanouk boulevards, which is slated to be finished in 2011, is selling units in the price range of between $460,000 and $1.6 million.
Other firms are also planning high rise building in the city. Local firm Royal Group has also announced they plan to begin construction on two 25-story buildings near Phsar Thmei by the end of the year.
The Overseas Cambodian Investment Corporation, which owns Canadia Bank, is building a 30-story tower near the railway station on Monivong Boulevard for completion in 2009.
Sung Bonna, president of local real estate firm Bonna Realty, said that of the major real estate projects in the country he had a lot of confidence in the IFC.
“In terms of location, in terms of the credit of the company, in terms of the timing, this looks like a good idea,” he said.
Michael Kim, chief consultant for Yon Woo Cambodia Ltd Co, which is building Gold Tower 42, said that companies are taking a risk with constructing so many buildings at the same time in Phnom Penh. But as the projects have already been financed, the risk is on the financing companies, not customers, he maintained.
The rising price of construction materials may force an increase in the unit costs at Gold Tower, Michael Kim said, adding that all retail space in Gold Tower has been sold, and 60 percent of residential units are spoken for.
Famed architect Vann Molyvann, who designed the Independence Monument and Olympic Stadium, said on Wednesday that the high rise projects are good for the city, but he questioned whether too many of the projects are coming too soon.
“I think now it’s not a good time…. If they can start with the small projects it can be better,” he said. “How many people can afford to live there?”