As part of its annual publication ‘White Book’, the European Chamber of Commerce has issued a list of recommendations for the government to support the development of the real estate and construction sectors.
Eurocham launched the 2019 edition of the White Book this week, delivering a set of trade and investment policy recommendations developed by members of the chamber.
In its publication, the chamber highlights the need for a set of universal standards of measurement for the real estate industry, while urging the government to increase financial controls on residential development projects in line with other Asean member states. This, Eurocham says, will provide adequate protection to consumers in case a project collapses.
The government should also look at adopting a regulatory framework to govern the property management industry in the country, and consult with the private sector to develop a set of standard operating procedures, according to the chamber.
In regards to land management and urban planning, the adoption of the new legal framework for development and management of coastal areas should be prioritised, Eurocham says.
Moreover, the government should consider permitting a ‘model project’ to showcase to prospective investors that coastal development under international standards is a viable possibility in Cambodia.
In its yearly publication, the chamber also says that consultants involved in construction projects in the country should be required to hold compulsory civil liability insurance, and that the government should authorise developers to treat parking spaces within condominiums as private units, while allowing for the issuance of private ownership certificates for parking spaces.
The digitalisation of the transfer process of immovable property should also be a priority, with Eurocham suggesting the creation of an online platform.
Safety in the construction sector is an important theme in the publication.
“In the construction context, all construction companies operating in Cambodia should be required to have their designated safety officers undergo mandatory occupational safety as well as health training before starting a new project, while implementing regulations that require structural building materials manufactured in the country to undergo independent quality assurance testing prior to sale,” it says.
Finally, Eurocham says there should be consultation with the private sector to ensure a practical set of building standards.
“We believe that the adoption of our recommendations will ensure a more robust and dynamic response from the private sector to the changing demands of the domestic and international market,” said Arnaud Darc, Eurocham chairman.
He said these reforms will enhance the Cambodian business environment in coming years, driving greater flows of trade and investment to and from Europe and other regions.
In April, the National Bank of Cambodia published its first Financial Stability Review (FSR), which projected that growth in the local real estate sector – particularly condominium, retail and office space – will slow down in upcoming months as supply increases.
The report pointed out delays in several construction projects within the condominium, retail, and office segments during 2018’s last quarter. This pending supply was expected to hit the market during the first half of 2019, along with the scheduled delivery of other projects.
“By the end of 2019, the supply of condominium units in all segments, retail space, and office space is expected to surge,” NBC said.
More than $2.7 billion worth of real estate projects were approved during the first four months of the year, a sharp 67.3 percent increase, according to the Ministry of Land and Urban Planning.
From January to April, a total of 1,420 projects were greenlighted, a significant increase compared to the 1,171 projects approved during the same period last year.