Should an investment follow the trend, or go against it? This matters a great deal, and following the trend means following the direction of “government-led area development policy.” Many readers will already know that Cambodia has thrown its full national effort behind developing the capital, Phnom Penh — so how much do we really understand about its area development and master planning? Here is an overview.
First, look at the northern part of Phnom Penh. Before 2007, this was still a largely undeveloped stretch of land, covered in yellow sand; it had once been Boeung Kak Lake, a beautiful lake hundreds of hectares in size and once quite deep and clear. By 2016, the lake had already been filled in for future development.
Next, look at the eastern part of Phnom Penh. In 2004, the Overseas Cambodian Investment Corporation (OCIC) received approval to develop Koh Pich (Diamond Island) into an international business centre. The island’s original residents signed a relocation agreement in 2005, and OCIC began construction on Diamond Island the following year. Diamond Island then rose quickly: because it sits just across a single bridge from the CBD, prices there started at around US$3,000-4,000-plus per square metre and have remained in a construction boom ever since.
As the CBD has grown increasingly crowded, residents have moved west, to the area around Phnom Penh International Airport, about 10 kilometres from the centre, driving explosive growth in the surrounding commercial and residential development. With foreign visitor arrivals rising each year — Phnom Penh International Airport received 927,542 passengers in the first half of 2018 alone — the airport reached saturation, prompting the construction of a new Phnom Penh international airport in the city’s southern district.
Under Phnom Penh’s first 20-year master plan (2015 to 2035), the southern part of the city is set to become an important commercial district and, in future, a key commercial hub for Phnom Penh. Heading from the city centre toward the south, before reaching National Road 2, drivers pass a 60-metre-wide, 10-kilometre-long boulevard named after Hun Sen, who served as Cambodia’s prime minister for 37 years before his son Hun Manet succeeded him in August 2023, and known as the “golden central axis” — Hun Sen Boulevard.
Hun Sen Boulevard is a crucial connecting artery in Phnom Penh’s road network, and is needed to ease congestion where the city’s busiest southern arterial roads converge. To the north it links to Street 271, connecting directly to Monivong Boulevard and Norodom Boulevard, the CBD’s main thoroughfares, and to the south it connects to National Road 2. The construction and extension of Hun Sen Boulevard has driven demand among residents preparing to relocate south, and as a result, well-known international and local developers have been racing to develop commercial, residential and apartment projects along both sides of the boulevard.
Major developments announced along Hun Sen Boulevard include Aeon Mall 3, Phnom Penh’s third Aeon shopping mall, covering 17.4 hectares, which had its grand opening on 7 April 2023 (preliminary opening 15 December 2022); Chip Mong Mall, developed by the well-known Cambodian conglomerate Chip Mong Group, covering 15 hectares and expected to open in 2022; and Peng Huort Diamond Plaza, covering 6 hectares and also expected to open in 2022.
More significantly, a new Phnom Penh international airport, costing US$1.5 billion and named Techo Takhmau International Airport, is being built just 10 kilometres from Hun Sen Boulevard. It is a Category 4F international airport, able to handle the world’s largest civil aircraft, including the Airbus A380 and Boeing 747. It will be about six times the size of the current Phnom Penh International Airport, covering 2,600 hectares, and at the time of writing was 30% complete, with completion expected as early as 2023. The Cambodian government plans to build a road connecting Hun Sen Boulevard to the new international airport. Once the new Phnom Penh international airport opens, it is expected to drive demand for housing, work and daily life in the surrounding area, and to boost residential, retail and commercial development along the connecting Hun Sen Boulevard corridor, pushing up land prices there.
In Phnom Penh, land prices around Hun Sen Boulevard have already risen from about US$60 per square metre to US$200 per square metre — and that is only after the surrounding dirt roads were upgraded. Local property industry figures predict that Phnom Penh’s future development targets are Bangkok and Hanoi.
As the saying goes, things change from decade to decade. Construction along Hun Sen Boulevard is proceeding around the clock, and with three more major shopping centres set to open, the area is expected to take on a new commercial character. As more large-scale developments are completed, the area could, within the next five years, become a thriving shopping, residential and commercial district for Phnom Penh.
Have a question about this guide? Leave a comment below, or ask Zagdim directly.
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