[English] Funan Techo Canal: Implications For Cambodia Real Estate
CBRE Cambodia Viewpoint on Funan Techo Canal: Implications for Real Estate highlights perspectives from different angles as well as CBRE Cambodia’s view toward the US$ 1.7 billion canal project.
On 5th August 2024, the ambitious 180km canal project was launched by the Cambodian Prime Minister, Samdech Hun Manet, with a completion date set for 2028. This new waterway is anticipated to yield an Economic Rate of Return (ERR) between 20% and 31%, according to the Royal Government of Cambodia. It aims to establish a new logistics route and is projected to decrease the volume of goods transported to and from Cambodia through Vietnam’s port by approximately 70% upon completion. Despite certain concerns, particularly regarding economic viability, environmental impact, and geopolitical issues, the project managed to commence. The funding sources include joint ventures between local state-owned firms, Phnom Penh Autonomous Port and Sihanoukville Autonomous Port, in partnership with the local conglomerate, Oversea Cambodian Investment Corporation (OCIC), for the initial 21km. The remainder of the project is in collaboration between the two state firms and the China Road and Bridge Corporation (CRBC).
Key Points:
- The canal not only have positive impact for Cambodia logistics, transportations, and economy but also plays significant role for trade independence and regional connectivity.
- The canal is anticipated to shift the industrial developments of Phnom Penh from the west toward the south and southeast.
- Development of the canal and supporting infrastructures are expected to draw both genuine investments and speculations, creating movements in the real estate transactions and prices but not in all the areas.
- CBRE Cambodia anticipates new real estate developments in the area, particularly in the industrial and logistics sectors, as well as in affordable residential segments such as land subdivisions and landed houses. The canal is also expected to create downstream opportunities such as agri-business and tourism.