OTK Royal One, a subsidiary of local conglomerate Royal Group, started construction yesterday of Royal One, a twin-building project with an investment capital of $230 million.
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The buildings, each one to reach 68 storeys high, are located in prime real estate in the corner of Russian Boulevard and Monivong Boulevard, and will include condominiums, shopping malls, fitness centres and restaurants.
The project, which is being developed together with China-based Huashi Group, will become a landmark in the Cambodian capital and a source of pride for locals, the developer said at the groundbreaking.
“These new commercial buildings will be the tallest in Cambodia and will promote the local real estate sector,” Mr Kith Thieng, president of OTK Royal One said, adding that construction will take three years.
Dith Channa, CEO of Lucky Realty, said the project will raise the profile of Cambodia as a real estate investment destination.
“It will boost land prices around the area and attract big investors from overseas as well as tourists that want to see how it changes the city.
“When such large investments are involved, the developer always does proper market research, so I am sure this project will be a success,” he added.
Sear Chailin, CEO of CL Realty, welcomed the investment, saying that having such large investments in high-rise buildings is sign investors have confidence in the market.
“We have many high-rise buildings popping up around Phnom Penh, which is good because it increases buyers’ options.
“Supply and demand in high-rise buildings is not a concern right now; however, in the future supply will increase, and we will need some time for demand to catch up,” Mr Chailin said.
The condo supply in Phnom Penh increased by nearly 19 percent in the last quarter of 2018, with 2,234 new units joining the market, according to CBRE’s latest report.
Eight new projects were completed in the last quarter of 2018, CBRE said.
The mid-range segment – with the completion of projects like East View, Sky 31, and The View – saw the highest influx, accounting for over 40 percent of all completed stock in the quarter.
The affordable segment also witnessed a high influx, with 870 new units, 78 percent of which were located in Sen Sok district.
The report also points out that the largest condo project completed in the quarter belongs to the affordable segment. Sen Sok Town III added 468 units to the market, approximately 20 percent of the total supply to enter the market during the quarter.
Meanwhile, six new condo projects were launched during 2018’s last quarter, totalling around 2,000 units. Over half of the stock was launched by R&F Properties, which introduced R&F Glory (Phase 1) and R&F City (Phase 2), comprising 440 and 792 units, respectively, according to the report.
Condo sales prices remained relatively unchanged, with an average quarter-on-quarter upward adjustment of less than 1 percent across the sector.
In December, the Ministry of Land Management reported a 19 percent drop in the number of approved construction projects for 2018, with only 2,867 projects being greenlighted, compared to 3,052 in 2017.
Total investment in construction projects last year totalled $5.2 billion, down from 2017’s $6.4 billion.