In an ambitious deal that could change the face of the city, Phnom Penh Autonomous Port (PPAP) has leased nine hectares of land along the Tonle Sap River for the next 50 years to Chean Chhoeng Thai Group, a subsidiary of Yuetai Group, a major Chinese real estate developer.
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PPAP has already been paid $16.5 million (the full amount) for the deal, which will see the development of the area that stretches from Chroy Changvar Bridge – also known as the Cambodia-Japan Friendship Bridge – to the Night Market into a commercial complex, according to the press release.
“PPAP is pleased to formally announce to investors and the public that on June 29, PPAP and Chean Chhoeng Thai Group signed a contract on the lease of land, from Chroy Changvar Bridge to the Night Market, to develop a ‘Commercial Complex,’” it said.
The aim of the project is to generate revenue for the lessee and to participate in urban development along the river, it said.
It added that it will include an arts and culture centre, watersports area, floating market, technology centre, apartment buildings, and five-star hotels, among others.
Sorn Seap, founder and director of Key Real Estate and executive vice president of Cambodian Valuers and Estate Agents Association (CVEA), welcomed PPAP’s announcement, explaining that the project will not only develop the city, but also help make it more visually appealing.
“It is such a big project from what I heard. It will not just contribute to the construction and real estate sectors; it will also beautify our city.
“It will help boost the number of investors and tourists,” Mr Seap said, adding, however, that due to its location along the river, the developers need to ensure the project is in line with Phnom Penh’s master plan.
Hei Bavy, PPAP’s director general, could not be reached for comment yesterday.
Soleil Lamun, director of the Listing & Disclosure Department at the Cambodia Securities Exchange (CSX), said the deal will make PPAP’s stock more attractive to investors.
“Suddenly having an extra $16.5 million in revenue is a big surprise. It should attract more interest from public investors.”
According to the contract, Chean Chhoeng Thai Group will use its own funds to build public infrastructure, including an embankment from Chroy Changvar Bridge to the Night Market that will cost $19 million.
To offset the impact of the deal on PPAP’s business performance, Chean Chhoeng Thai Group will also build a new administration building for the port for $11 million and two new terminals, costing a combined $30 million.
“PPAP will continue to operate a multi-purpose terminal and a national and international tourist terminal at the leased location,” the press release said.