Cambodia Construction Sector attracts Malaysian construction companies

Cambodia : Over the last ten years, Cambodia’s real estate and construction sector has seen remarkable growth. This is due to nationwide economic development, an influx of foreign investment and a growing middle-class population seeking homes in key central locations.

According to the Ministry of Economy and Finance Latest’s Macroeconomic Report, the Cambodia construction and property sectors are projected to grow by 2.9% and 2.7% in 2021 respectively, after contracting by 2.4% and 4.9% in 2020.

There is thus little surprise that many Malaysian companies have expressed strong interest in investing in Cambodia. During a recent online meeting between the Cambodia Constructors Association (CCA) and the Master Builders Association Malaysia (MBAM) , members discussed challenges in the construction sector and networked for potential partnerships.

The Cambodia Constructors Association is the first and largest construction association in Cambodia and it represents roughly 200 construction-related companies. The Master Builders Association Malaysia on the other hand was founded in 1954 and has since grown close to 17,000 direct and indirect members.

China currently holds the top spot for investment in Cambodia via investments in agriculture, infrastructure and financial institutions.

On the other hand, trade between Malaysia and Cambodia in the first half of 2018 rose 45 percent year-on-year to $303.6 million versus $209 million. It mostly involved exports of petroleum products, metal for building materials and construction from Malaysia. Malaysia’s investment in Cambodia has grown over the years. According to the Cambodian government, “ the cumulative FDI (Foreign Direct Investment) approved in the period of 1994-2019, the largest share was from China (21.81 percent), which in the early years was the source of extensive investment in the field of infrastructure, resource development including rubber, and tourism. China is followed by Korea at 6.16 percent and UK at 5.01 percent. The other major sources are Malaysia (3.59 percent), Japan (3.13 percent), Hong Kong (3.05 percent), Taiwan (1.77 percent), Vietnam (2.31 percent), Singapore (1.64 percent) and Thailand (1.54 percent), whose investment comes mainly from garment industry companies.”

Political instability in Cambodia’s neighbouring country Myanmar in the form of the sudden military takeover that has led to the withdrawal of substantial FDI and the suspension of projects such as Amata’s USD 1 Billion project (click to read our previous article on this). In contrast, Cambodia is thriving as its stability attracts more foreign investments. This is further evidenced by Malaysian companies’ strong and growing interest investing in the Kingdom’s construction and property sector.



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