PHNOM PENH -- The plush office building on Phnom Penh's riverside was meant to showcase one of the dozens of new high-rise apartments being built all over the Cambodian capital.
But the place was empty, save for an elaborate model of The Bay, a proposed $500 million multipurpose real estate project being developed by Singapore's TEHO International Inc. Ltd.
"Sorry mister, we are closed, the project is under review," said the sole staff member inside the building, adding that the office will be rented to new tenants soon.
TEHO declined to answer questions about the project's future, but on Aug. 26 said that while the hotel planned for the complex would go ahead, the residential part was being put on hold due to "a heightened risk of oversupply."
In one of Asia's most remarkable building booms, dozens of new multistory residences are under construction -- towering over what was historically a low-rise city and standing as symbols of the country's long economic expansion.
Bolstered by growing tourist numbers and garment exports to Europe and the U.S, Cambodia's economy has grown by around 6% to 7% a year over the past decade and a half. Recently construction has become an increasingly important sector, however, making up a sixth of last year's growth, according to the World Bank.
"The past few years have seen a boom in Cambodia," said Blaise Killian, advocacy manager at EuroCham Cambodia, which promotes European businesses in the country. "Initially it was [because of] tourism and garments, but real estate and construction has been fueling growth in recent years."
Not all developers and real estate agents in the city agree with TEHO's view that the city's residential market faces oversupply. Citing the country's economic growth and young population, Meridian International Holding (Cambodia) said that "we believe in time to come, all generations in Cambodia will slowly accept the concept of condominium and [this] will lead to a high demand later on."
Builders are banking on Cambodia's economic expansion continuing and its youth ending up with money to spend on the capital's array of apartments scheduled for completion in the coming half decade. Property advisors Knight Frank said in a recent report that Phnom Penh's supply of condominiums will increase seven-fold by 2020.
With 50% of its 16 million population under 24 and two-thirds below 30, the country should continue to grow economically, after this year crossing the World Bank's gross domestic product threshold for "lower middle income" countries.
Unsurprisingly, Cambodia's government is bullish about the country's long-term economic prospects. Phay Siphan, spokesman for the Council of Ministers, said that "inflation is low and GDP continues to grow." Dismissing concerns that the capital's building boom could be a bubble waiting to burst, he told the Nikkei Asian Review that growth means more people have money to spend.
"There is a growing middle class, they have aspirations," he said.
Independent experts agree, at least in relation to the capital. A recent report on Southeast Asian cities published by the Economist Intelligence Unit suggested that Phnom Penh's median household income could rocket to $32,200 a year by 2030 from $10,900 in 2015.
Phnom Penh's current median household income is just under the comparable level of $12,400 in Bangkok and more than double Ho Chi Minh City's $5,200, in Vietnam. But it is nearly nine times Cambodia's estimated $1,250 GDP per capita, suggesting that rural incomes languish way below those in the capital.
The new construction projects suggest that Phnom Penh's skyline is changing along the lines of bigger neighboring cities -- mirroring a trend seen in other regional capitals such as Vientiane, where several large new shopping malls are being built.
Sebastian Uy, the French-Cambodian owner of Le Grand Mekong Property, a Phnom Penh real estate agency, said that Cambodia's growing middle class and youth population bulge has drawn a lot of emigrants or descendants of emigrants back to the homeland. "There are a lot of potential future customers; most of the population of this country is under 40," he said.
But, as TEHO's project revision hints, there are concerns that Phnom Penh's building boom could turn out to be unsustainable.
"Moody's, the Ministry of Economy and Finance, the Asian Development Bank and other organizations have started to show concern and warning about the oversupply of real estate," said Hiroshi Suzuki, CEO and chief economist at the Business Research Institute for Cambodia.
"It seems that a lot of these properties are losing money, and there are so many. How can there be a return on investment with so many?" said Yim Sovann, spokesman for the opposition Cambodian National Rescue Party.
An answer could lie in the provenance of the investment. Foreign real estate companies are heavily involved in Phnom Penh, with some local developers and real estate agents estimating that around 60% are Chinese. "They can invest three times less than they need to at home," said Uy, explaining why Chinese competitors have made such a mark on Phnom Penh's property sector. "Even if they sell only half the apartments, they will make money."
In 2015, construction and real estate made up 62% of approved foreign investment projects, while earlier this year Knight Frank reported that real estate made up 15% of total foreign direct investment over the two decades from 1994.
For the government, the building boom is a signal that businesses, both local and foreign, "have free and fair competition and that they are confident to invest in Cambodia," said Phay Siphan.
However, there is a widespread view that the building boom is a fig-leaf for corruption, and that it exemplifies Cambodia's growing divides between rich and poor people and between urban and rural communities.
These are not empty fears. Transparency International ranked Cambodia 150th out of 168 countries in its 2015 global report on perceptions of corruption. Global Witness, an investigative nongovernmental organization based in London, alleged in 2016 that Prime Minister Hun Sen had abused his position to accumulate vast wealth over the last three decades.
"I'm concerned about why this building is happening and where it will lead," said Vannarith Chheang, a Cambodian political analyst based in Singapore. "Where the money comes from, if there is a lot of money laundering going on with all this construction, we just don't know."
The opposition -- which has staged demonstrations and had running battles with security forces since a disputed 2013 election -- is more emphatic. "There is a lot of money laundering," Yim Sovann told the NAR. "The economy is for the benefit of the corrupt officials and businesses."
Big property developments in Cambodia have a history of lurid controversy. The Bay ran into trouble prior to the suspension of its residential element because a local partner of TEHO was filmed assaulting a female TV presenter. TEHO subsequently partnered instead with a daughter of Cambodia's deputy prime minister.
In the heart of Phnom Penh, the former tourist attraction Boeung Kak lake has been filled with sand since 2012. A company run by a ruling party senator won a 99-year lease to develop the former lake, and has plans to build a 100-hectare complex called Phnom Penh City Center, with construction underway of hotels and apartments on the Boeung Kak sands.
Lakeside residents have protested the development and been beaten by police and jailed as a result.
Such land grabs have seen tens of thousands of families pushed off their holdings across Cambodia since the 1990s, including protesting farmers who have been faced down by police.
On Oct. 10 police blocked up to 500 protestors from continuing a march through the capital, and "launched an unprovoked and violent attack on land activist Chan Puthisak, a Boeung Kak Lake community representative," according to a statement by Licadho, a local human rights NGO.
"The poor Cambodian farmers visit Phnom Penh and are surprised," said Vannarith Chheang, discussing the city's ascending skyline. "They see a widening gap and this can create social discontent."
Growing inequality and breakneck urban development could in turn undermine Cambodia's much cherished openness to investors and, in the longer term, weigh on the growing economy.
"The rates of growth will not continue unless Cambodia reins in corruption, promotes property rights and the rule of law. It will drive away good investment that is high compliance," said Sophal Ear, author of "Aid Dependence in Cambodia: How Foreign Assistance Undermines Democracy."