Nestled in northwestern Cambodia, the leading rice-producing province of Battambang has shown some remarkable growth in real estate development over the last few years.
While the real estate market there is traditionally known for its colonial buildings, more than 11 residential borey projects have recently been developed, with signs of many more to come.
Ear Veng Mong, the CEO of Borey Rom Chek in Battambang city, has invested more than $30 million into a 19-hectare borey development and construction started in 2015.
While discussing his investment to local media, Mr Veng Mong said Battambang had great future potential because government officials and the Ministry of Tourism have been working together to turn the province into a tourism hot-spot.
Mr Veng Mong added that he believes “the province is already rapidly developing and already has a lot of people within a ‘medium income bracket’ who are able to afford residential housing”.
This belief is one of the key reasons Mr Veng Mong decided to start the development of his residential borey projects.
Ung Sangha, the Representative Office Manager of Bonna Realty in Battambang, agreed with Mr Veng Mong’s viewpoint, saying: “Investors cannot overlook Battambang’s investment potential, as Battambang is a big province with relatively good infrastructure and a population of over one million.”
However, he believes the local economy will need to continue to grow in order for the majority of local residents to afford to be able to buy housing in the province.
New infrastructure developments are bringing in more people and that infrastructure includes the new international border checkpoint in Battambang’s Sampov Loun district which connects Cambodia to Thailand’s Sa Kaeo province.
This international checkpoint will allow for more cross-border trade and tourists to pass through, which will lead to a boost of income for the local population.
The government also plans to expand the highway system connecting Battambang to Phnom Penh and Banteay Meanchey province over the coming years.
The result will improve accessibility and enable more trade within the province which has an economy that now relies heavily on the agricultural industry and little else.
Despite Battambang’s real estate investment potential, land prices do not show any sign of rising to the levels recorded in other key provinces, such as Sihanoukville and Siem Reap.
Mr Sangha said land prices in residential areas are between $60 to $120 per square metre, which he believes to be very affordable for local buyers.
However, land prices in business areas are between $1,500 and $1,800 per square metre and $1,800 and $2,200 per square metre in the commercial sector.
This dramatic price contrast between residential and commercial areas demonstrates the increasing demand for land within Battambang’s central business district.
As a result of these competitive prices, more investors are conducting feasibility studies on the real estate potential in Battambang. Mr Sangha has confirmed that Bonna Realty has seen a major influx in the amount of inquiries concerning land and property prices over the last six months.
Battambang’s investment potential has already attracted more cement firms to establish operations in response to the growing number of construction companies operating there. The $230 million Battambang Conch Cement project is set to start operation in December 2017.
Thailand’s massive Siam Cement Group has also announced it is preparing to open its third cement plant in the province in 2018, which will have a production capacity of 1.8 million tonnes a year once operational.
Heng Tola, a local investor, has been developing both residential and land projects in Taprouch village in Sangkat Kdol Doun Teav since January 2015.
“The reason I invested in these projects is that our country continues to have political stability, and an average economic growth rate of seven percent per year,” he said.
He believes that due to the rising middle-income population, there will be high demand from Battambang locals in the near future as they look to purchase a new home.
However, he has already enjoyed significant support from local people, who have bought land and houses for residential living in his current projects.
“In 2015, we started with a total land size of 1.5 hectares, and two and a half years later we have increased our projects up to 20 hectares, with 200 flat houses, one market and one cinema,” he said.
Ultimately, Battambang’s real estate agents and investors are optimistic that the province will attract more local and international investors into the real estate market over the coming years.
Active improvements to infrastructure and domestic connectivity will continue to boost investors’ overall confidence in an area which is bustling with opportunity.
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Vat Vin is an Editor @Realestate.com.kh