Phnom Penh is the epicenter of the Kingdom's construction and real estate growth for much of the decade. Supplied.
Cambodia’s construction and real estate sectors may have a better cause for optimism in 2022. Earlier in January, the National Bank of Cambodia (NBC) released a report on the bank sector’s macroeconomic progress and outlook for 2022.
According to NBC’s report, the global economy is expected to grow at different rates, depending on how effective COVID-19 prevention measures are in different countries. At present, the omicron variant, though less severe in terms of symptoms, is noticeably more transmissible; stoking fears of lockdowns that may stifle economies once again.
Despite omicron’s presence, NBC’s report highlights promise from Cambodia’s exports, namely in garments and textiles, as well as new launches in producing electronic parts and bicycles to add to the Kingdom’s export portfolio.
Additionally, Japanese mall developer AEON is mulling to build a 30,000 sq meter logistics center in Sihanoukville in 2023. The gigantic center will offer import storage, customs clearance and support for cross-border online retail.
Ford is investing $21 million dollars to manufacture its SUV lineup in Cambodia. Supplied.
According to a report by the Khmer Times, US automaker Ford has invested $21 million in an assembly line in Cambodia for the production of the Ford Ranger and Ford Everest. The assembly line is currently under construction and will begin production in April.
The report further highlights the importance of the Regional Comprehensive Economic Partnership Agreement (RCEP), an agreement between the 10 ASEAN Member States and the Free Trade Partners (Australia, New Zealand, China, South Korea and Japan) entered into force earlier this year. This will provide opportunities for trade in services and goods, investment and e-commerce.
Cambodia’s construction and real estate sector is also expected to see a recovery albeit a conservative one. NBC cites a pick-up in domestic activity and investment since the economy largely reopened in the latter half of 2021. Rising domestic revenue and consequent investment will be the key drivers of the Kingdom’s property sector growth.
It is worth noting that the local interest for properties has kept real estate activity going in Cambodia. Landed properties have noticeably become more popular, especially those offered in the affordable and mid-range of the market’s spectrum.
In an earlier report by Realestate.com.kh, Cambodia’s largest real estate classified’s portal, a sizable section of the website’s traffic has been searching landed properties in Sen Sok and new developments Chroy Changvar - two districts that are seeing continued growth despite the pandemic.
That is not to say condominiums have been completely overtaken by landed homes. According to Realestate.com.kh, the search for residential properties (condos and landed homes) in core areas of the city such as Chamkarmon and Boeung Keng Kang still topped the popular site’s searches in 2021. How regular discounts are offered and the overall decrease in average quoting prices are still driving interest from local middle-class and international buyers.
Given difficulties faced in the first half of 2021, Cambodia’s growth for the previous year is only expected to be around 2%, according to the NBC as well as the WorldBank and Asia Development Bank. However, all three banking institutions project ~5% growth for Cambodia in 2022.