PHNOM PENH -- Approved construction investment in Cambodia surged nearly 90% to $3.1 billion in the second quarter, according to new data, as "bullish" Chinese investors dominate a booming condominium market in Phnom Penh.
The preliminary approved investment figures draw from government data for April and forecasts by real estate firm CBRE, which released the numbers on Wednesday.
The figures show an 86% rise compared to the first three months of the year, with the $3.1 billion, split across 1,008 projects. The figures also include infrastructure projects, a sector dominated by China, which is providing Cambodia billions in loans to build roads, bridges, ports and airports.
CBRE projects that investment for the first half of the year hit $4.8 billion, more than double the amount in the first half of 2018.
CBRE Cambodia manager of research and consulting James Hewson said turbulence surrounding the 2018 national election had resulted in weaker-than-expected numbers last year, with investors wary of spending in the lead up to the ballot.
In the residential sector, Hewson said there was a "high volume" of Chinese investment in the condominium market, which saw eight new projects, comprising 5,853 units, announced between April and June.
CBRE had predicted condominium stocks to double from about 15,000 units to 30,000 this year but construction delays and overly ambitious completion dates mean it will likely fall short, Hewson said.
Five projects, comprising 1,393 units, came online in the second quarter, bringing the total stock to 16,658 units.
Major Chinese developers with projects underway include Prince Real Estate, Yeu Tai and R&F Properties.
Chinese investors are also increasingly moving into strata-titled office developments, which refer to buildings sold off in portions by the developer.
"That's something that's very new here, but it's going to be growing very quickly over the next few years and we'll see if it's a success or not," Hewson said.
Unlike the centrally-owned office market -- which, according to CBRE figures, has an occupancy rate of about 86% -- the strata-title sector is more opaque and difficult to track, he said.
Domestic investment, meanwhile, is largely concentrated in landed property, predominantly gated communities known locally as borays. CBRE figures show there are about 178 such existing developments with about more 40 in the pipeline.
Hewson said local developers had begun focusing on the lower-end "affordable" condominium market, which includes properties with an asking price of $1,500 per sq. meter.
Naim Khan-Turk, senior sales consultant at SEAPS, a Cambodian real estate agency, said while this trend may draw more Cambodian buyers into the segment, a broader embrace of condominiums by locals would take time.
"The general mentality is more buy land, build a house. That's still significant today," Khan-Turk said.
"I think the key factor is a lot of the new supply has been at the high-end level. It's not been within people's financial range," he added.
"It's a question of time. When people get more money in their pocket, their aspirations rise. Until we start to see more people with money in their pocket, they're not starting the aspirational thing of buying a condo."