Cambodia Sees Sharp Decline in Construction Investment in 2018

• 25 December 2018
• Local News
• 1877 Views

Although construction activities have yet to decline, construction investment capital has dropped remarkably in 2018, according to a report by the Ministry of Land Management Urban Planning and Construction (MLMUPC), issued on 24 December, 2018.

According to the report, 2018 saw the ministry approve 2,867 construction projects covering 11 million square meters in construction area, with an estimated investment capital of about US$5.2 billion. This represents a sharp year-on-year fall with investment capital down by 18.66%, compared to the more than US$6.4 billion investment in 2017. The number of projects (2,867) has seen a decline of 6.4% compared to the 3,052 projects approved in 2017.

The slump in construction investment in 2018 is in line with recent IMF forecasts showing that the construction and real estate sector in Cambodia will reach the top of a cycle. (Read more)

However, the decrease in figures is also due to previously approved projects still being under construction. In this regard, Mr Chiv Siv Pheng, general manager of the Cambodia Constructors Associations (CCA) told Construction&Property Magazine recently that “[Construction and real estate] fall because there are a lot of construction projects and if they [construction projects] have not sold out, they [developer] will not build more”.

Cambodian construction investors remain optimistic about the sector, for instance; renowned developer Neak Oknha Pung Keav Se, Chairman of Canadia Bank and Overseas Cambodia Investment Corporation (OCIC) said that “the decline in construction investment is not a big deal because economic needs allow for adjustment, up and down…this is usual for an economy.”

In addition, Cambodian real estate analyst Mr Sorn Seap also said that “although there is a lot of construction, compared to modern cities, there is a lot more potential to go at least for another 10 to 20 years because we do not have many modern cities or skyscrapers yet.”

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