The area on the Eastern bank of the Mekong River in Kandal’s Arey Ksat is located close to the Cambodian capital of Phnom Penh and is considered a key part of the government's plan to develop new urban centres outside the capital city.
As Arey Ksat starts to garner attention from potential property investors with the launch of Mekong Quay City in 2025 and the upcoming infrastructure developments such as the new Cambodia-Korea Friendship Bridge due to start in 2025, there are high hopes for the area to boost travel and economic growth, as well as entice property development which could increase the real estate sector and associated prices.
When Was Arey Ksat City Formed?
The Royal Government of Cambodia issued a sub-decree on the new establishment of Arey Ksat City in Kandal province in late 2022, and the area includes six communes in Khsach Kandal district and five communes in Leva Em district of Kandal province.
The area is also separated into 11 Sangkats including Bak Dav, Koh Oknha Tey, Prek Ampil, Prek Luong, Prek Takov, Svay Chrum (former communes of Ksach Kandal district), Arey Ksat, Sarika Keo, Peam Oknha Ong, Prek Kmeng, and Barong (former communes of Lvea Em district).
In 2024, Arey Ksat City in Kandal province was confirmed to retain its autonomy and would not be incorporated into the administration of Phnom Penh with the Prime Minister at the time, Hun Sen, explaining that land originally belonged to Kandal province and had undergone multiple border adjustments to be included within the jurisdiction of Phnom Penh.
With Arey Ksat City not being annexed to the Phnom Penh Capital Administration, it means that Kandal Province exercises property tax regulations within Arey Ksat City.
Untapped Potential of the Satellite City
Currently, most transport to reach the area from the capital is conducted via the ferry and boat companies operating between Arey Ksat and Phnom Penh
In December 2024, current Cambodian Prime Minister Hun Manet suggested Arey Ksat will become “an industrial and service hub” and that the satellite city’s population would grow to match that of the capital Phnom Penh. This is underpinned by the government’s expectation that the region would transition from an agricultural region into an industrial area driven by the output of factories.
Infrastructure development is seen as key to the Arey Ksat’s economic and population growth and the construction of bridges connecting the area would make this a reality. Hun Maent proposed the development of the projects in the area would see development spread eastward, connecting to National Road 8.
There were also ideas put forward such as the construction of an underground tunnel running beneath the Chattomuk River from Phnom Penh but this would be the first in the area, if not the entire Kingdom.
Mekong Quay City
The “Mekong Quay City” project is a joint development between TP Moral Group (TPMG) and Khun Sea Import Export Group and located in Arey Ksat, along the eastern bank of the Mekong River, directly across from the Koh Norea development project and covers an area of 210 hectares.
Khun Sengpheng, CEO of TP Moral Group, said 140 hectares of the development project will be divided into six sectors: commercial, residential, hospitality, education, health, tourism and culture.
70 hectares will be reserved for public infrastructure development, including the construction of riverbanks, roads, pedestrian and cycle paths, public recreational spaces, sports facilities and green parks.
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Cambodia-Korea Friendship Bridge
The proposed Cambodia-Korea Friendship Bridge will connect Phnom Penh's Chroy Changvar to Arey Ksat and is expected to significantly boost economic activity in the area but construction is only due to start in mid 2025.
The bridge will span from the area near the current night market in the capital to Arey Ksat town, covering a total length of 2,375 metres with a width of 27.5 metres.
The project is expected to be completed in five years (2030) and will be funded by a US $235 million loan from South Korea’s Export-Import Bank.
Does Arey Ksat Offer Good Investment Potential?
Some local realtors expect the connectivity from the bridges would boost real estate prices which in 2025 remain low compared to those in Phnom Penh. Land in the Arey Ksat area varies around US $500 to $800 per square metre, while the cheapest land can be purchased from US $10 per square metre.
Kuoch Chamroeun, Kandal Governor, said there is a strong demand for quality and modern housing to enter the market, which Mekong Quay City is aiming to address.
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Whether Arey Ksat is a good place to buy a home depends on several factors, including your investment goals, lifestyle preferences, and the current state of infrastructure development and aforementioned plans which may or may not materialise but the reality and timeframe of these would impact financial returns on investments too.
Pros
- Potential for Growth: Arey Ksat is seen as a promising area for future development, with significant infrastructure projects underway, which should lead to increased property values over time.
- Environmental Advantages: Located near the Chaktomuk River, Arey Ksat offers a scenic environment with green areas which should appeal to those seeking a quieter lifestyle but how much of these will be maintained if the area is targeted as a prime investment hub for industrial output, real estate development and infrastructure remains to be seen
- Industrial and Service Hub: The area is expected to evolve into an industrial and service hub, which might boost employment opportunities and stimulate local economic growth but would also bring with it a time period of growing pains with construction and amenities needing to keep pace with the development.
Cons
- Infrastructure Challenges: Currently, connectivity to Phnom Penh is limited, which can hinder daily commutes and access to amenities - and although these are being addressed, the timeliness of these infrastructure projects would be a key consideration. The Mekong Quay City development project’s timeline for completion and budget were not disclosed when it was launched as a prime example.
- Land Price Variability: Land prices vary significantly depending on the location within Arey Ksat, which may cause challenges in finding affordable quality options.
- Legal and Security Concerns: There are concerns about alleged property rights and the need for strong legal protection with land demarcation and proper allocation of ownership of these titles.
Arey Ksat could well be a good long-term investment opportunity with potential growth but would require a patient investor. The regional economic climate headwinds and infrastructure limitations may pose challenges in the short to mid-term.
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