This is a best prospect industry sector for this country. Includes a market overview and trade data.

Overview

Cambodia is in the process of rehabilitating and expanding its infrastructure, principally with assistance from international donors.  Given the current poor condition of the country’s infrastructure, construction and engineering services will be in high demand for the foreseeable future.  Public works and transportation, including the road network, are a high priority for the Cambodian government.  The total investment in infrastructure in Cambodia is estimated to be in the range of $12 billion to $16 billion from 2013 to 2022.  Infrastructure investment is generally state-led and mostly financed by foreign aid.  In addition to infrastructure construction, Cambodia has witnessed a major boom in residential and commercial construction over the last decade.  Numerous residential and commercial development projects are underway, such as mixed-use towers, shopping malls, and suburban commercial-residential developments. 

In 2018, approved residential and commercial development projects (excluding mega projects of $1 billion or more) increased by 14 percent to $4.6 billion[1].  By the end of the first quarter of 2018, condominium supply had increased to close to 10,000 units, rising approximately 14% over the first quarter of 2017; by the end of 2018, number of condominium supply is expected to exceed 20,000 units.  Sihanoukville has become a newly emerging high-rise construction area, with approval numbers totaled 238 buildings in 2018, up from 188 buildings in 2017.  Sihanoukville, together with Phnom Penh, accounts for 1,217 buildings of five stories and above. 

According to the World Bank’s economic update report on Cambodia, the construction sector created around 200,000 jobs in 2016, a 33.3 percent year-on-year increase.  Wages of skilled construction workers range from $300 to $450 a month.

Construction Projects

2016

2017

2018

Total Value of Approved Construction Projects

5,256,120

6,798,663

5,755,070

Construction materials imported

548,000

621,000

954,000

Exchange Rate: 1 USD

4,000 riel

4,000 riel

4,000 riel

Unit: USD thousands
Data Sources:
Approved construction projects:  2018 Annual Report, Ministry of Land Management, Urban Planning and Construction
Construction materials imported:  Ministry of Economy and Finance
 

Leading Sub-Sectors 

The Japanese government, World Bank, Asian Development Bank (ADB), and the Chinese government are especially active in road, bridge, and railway construction in Cambodia.  The Cambodian government has also offered Build-Operate-Transfer (BOT) concessions to several companies to rehabilitate portions of Cambodia’s badly degraded national highway system.  Cambodia is also eager to upgrade its provincial airports. Because there are limited funds in the national budget to pursue such projects, Cambodia has offered BOT concessions for renovating provincial airports as well. 

The Chinese government has provided funds to build a new, larger national stadium on 80 hectares on the outskirts of Phnom Penh to host major sporting events, including the Southeast Asian Games.  This project includes the stadium itself as well as water systems, electrification, drainage systems, a safari park, an international-standard parking garage, a world-class golf course with 36 holes, and five-star hotels. 

Numerous commercial and residential projects in Phnom Penh are under construction or near completion.  However, an expected oversupply of residential units has led to the slowdown of new projects.  Total year-over-year approved construction investment dropped by 15% to $5.8 billion in 2018. 

The establishment of several special economic zones (SEZs) presents numerous opportunities for development of power, water, and road infrastructure within these areas.  Intended to attract manufacturing and export-oriented companies, SEZs are located near the borders of Thailand and Vietnam and in Phnom Penh, Sihanoukville, and Kampot. 

The main sources of foreign expertise and construction materials for large commercial and residential projects are currently from Korea, Thailand, Vietnam, and China, but high-quality American materials and fixtures are sought by Cambodia’s urban and foreign residents.
 

Opportunities

Prospects exist in road and commercial construction working with international donors and private companies.  Construction materials and heavy construction machinery are also needed to support this sector.
 

Web Resources

World Bank
Asian Development Bank
Ministry of Public Works and Transport
Ministry of Land Management, Urban Planning and Construction
Council for the Development of Cambodia
Phnom Penh Municipality
Cambodian Valuers and Estate Agents Association
Cambodia Construction Association
Knight Frank real estate Consultancy Company
 

 

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