Small Sub-Plots Pose Investment Risk

Small Sub-Plots Pose Investment Risk

With a rapid boom in land subdivision business nationwide, industry insiders have warned that confined plots without adequate property infrastructure will only be left undeveloped.

Today hundreds of land division projects are being developed by local land sellers, especially in Phnom Penh’s rapidly developing and expanding outskirts in Dangkor, Por Senchey, Mean Chey and Chroy Changvar districts. Land plots sized 4.5m x 12m, 4.5m x 16m, and 5m x 16m are most commonly available for trading. Plots larger than this are rare.

However, buyers of these undeveloped properties often find themselves owning land that is too small to develop. More importantly, most of them don’t even realise the reality that the size of their plot will be reduced as the law requires that nothing can be built on the two metres of land surrounding the home with another 30cm to be reserved for residential sewage systems.

Many land sellers have violted Ministry of Land Management Urban Planning and Construction regulations by building roads only 6 metres wide instead of 7-10 metres and with insufficient sewage systems. Chrek Soknim, director of Century 21 Mekong told the Phnom Penh Post last year that owners are often left without enough money to upgrade the infrastructure and face legal problems in developing small parcels of land. “The land plot trade causes some problems for development because the land plot owners don’t have access to a proper public sewage system.”

Agreeing with Soknim, Nguon Chhayleang, CEO of Ratanaka Realty sees more opportunities than challenges in this business saying that the land does not grow like people. But he urges land developers to prioritise sustainability in their projects.

“Don’t just subdivide, sell and then run away. We, developers, should always think of who is going to use our land,” he told Construction and Property Magazine.

Chhayleang advises buyers to properly check the quality of the development. “They should always ask developers about their plan after selling all the land plots. A good manager can greatly enhance the value of the property.”

Chhayleang is now the selling and managing agent for the 5-hectare SurinPhumi land subdivision project launched in October 2015 and located along the National Road 2, near the exit of Samdech Hun Sen Boulevard, the largest boulevard in the city. The project contains over 147 plots sized between 104 and 603 square metres.

He claims SurinPhumi stands out in the market for three reasons: quality, strong management and providing a eco-friendly environment. The land plots are of a high quality and are ready to build on with complete infrastructure such as concrete roads, gardens, water and electricity connections and a sewerage system. Besides filling up the land to the national road level to prevent future flooding, the developer has also built main access roads of up to 15.5 metres wide.

Chhayleang also said that Ratanaka takes responsibility for overseeing the project from selling to managing the whole development and is committed to making the project a long-term and sustainable development.

Finally, SurinPhumi reserves a large part of the land for green space and also build fence along boundaries to ensure security and safety as well as to comfort buyers who enjoy natural surroundings. Having sold over 100% of Phase 1, SurinPhumi plans to launch Phase 2 in early May.

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Construction & Property Magazine title=Issue # 031

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