Poipet: From Gambling Hub to Industrial Boomtown

Oct. 24, 2017, 2:36 p.m.

Poipet is a city serving as Cambodia’s main border crossing with Thailand. Located in Banteay Meanchey Province, the seemingly sleepy border town has been gaining popularity as a gambling destination between the two countries.

However, the government plans of turning Poipet into an industrial zone is coming into place. It is believed that due to this - and the town’s proximity to Thailand - investors will seek opportunities to invest in the town’s manufacturing sector.

Vital infrastructure such as the railway link between Phnom Penh and Bangkok (via Poipet-Aranyaprathet) has already complemented and is expected to further contribute to the estimated $6 billion worth of trade between the two neighbors. Prime Minister Hun Sen indicated that his government also plans to further develop the national railway to increase its popularity among Cambodians.

Mr. Eric Wong, Administrator of SkyscraperCity Cambodia, shares a positive outlook with the border town’s growth saying: “Poipet has seen remarkable development in recent times with the establishment of more factories and businesses”. Mr. Wong’s family has invested in multiple businesses in Poipet due to the town’s strategic location to Thailand and believes that border trading between Cambodia and Thailand is already growing.

The establishment of the Sanco Poipet Special Economic Zone (SEZ) in 2014 is one of the key reasons for this growth and acts as a vital economic trading gate between Cambodia and Thailand, which is poised for future development.

Soeng Sophary, a spokesperson for the Ministry of Commerce Cambodia commented that:  “Thailand is one of the Kingdom’s main trade partners with both governments enjoying very close and amicable relations.’’ Sophary believes that due to these strong government ties, cross-border trade could increase to 15 billion USD by the end of 2020.

Sophary continued by stating that: “The value of imports from Thailand has decreased marginally, due to the fact that more Thai investors are building factories in Cambodia, at the same time, Cambodia’s exports to Thailand have actually increased.” She also believes that the new railway will be a major catalyst for improving infrastructure and will aid both Cambodia and Thailand in reaching their trade goals.

In terms of Poipet’s real estate market; land price is consistent and not seeing any signs of remarkable increase. However, Mr Sorn Seap, CEO of Key Real Estate believes the prices are expected to rise now that the railway project is finished and more industrial activity takes place.

He elaborates, “Currently, land prices for residential projects in areas without construction are between 200 and 300 USD per square metre, and in construction dense areas is priced between 300 and 500 USD  per square metre.”

Mr Sorn continued, “For commercial areas or downtown Poipet, prices range anywhere between 500 and 1,000 USD per square meter, while the land price located along National Road 5 or close to the border can reach up to 1,000 and 2,000 USD per square meter.”

Although residential property development isn’t seeing any drastic growth at the moment, Mr. Sorn stated he has seen some movement with a handful of Borey projects in the 50,000-100,000 USD price bracket being developed. Mr. Sorn is convinced there is serious potential in Poipet’s real estate industry in the future, due to increased employment opportunities from the existing SEZ, and the government’s industrial plans. Ultimately, more demand for labour in the city will lead to a need for residential housing.

The completion of the railway project is expected by real estate agents and experts will result in the increase of trade between Thailand and Cambodia and consequently encourage a rapid influx of investors building factories in Poipet. This will eventually have effects on boosting the local economy and incomes across the board.

Ultimately, this casino-dense border town is rapidly changing and is anticipated to become one of the most attractive investment destinations in Cambodia in the years to come.

Realestate.com.kh is proud to bring back Cambodia’s biggest Property & Lifestyle Market Expo which will be held on April 24 and 25 at Koh Pich Exhibition Center.

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nin.kang@realestate.com.kh

Tyler Stuart (English)

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tyler.stuart@realestate.com.kh

 

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