New-Build Speculation and the Financialization of Urban Development in the Global South: A Perspective from Phnom Penh, Cambodia

Abstract

This article analyzes how urban development and property management strategies shape and accelerate new-build speculation (i.e., speculation mechanisms attached to the development of newly built real estate projects) in Phnom Penh (the capital of Cambodia), a city experiencing a growing financialization of its real estate markets. By discussing dominant conceptions of property speculation within critical research in geography and urban studies, the article shows that speculation has primarily been seen as a fictitious and unproductive form of capital accumulation rather than as an effective mechanism of urban production. Analyzing the development of mixed-use, large-scale, and condominium projects, the article argues that not only does property speculation participate in shaping real estate development but also that the production and management of real estate projects “engineer” property speculation and the spatialization logics of real estate financialization. Four main mechanisms of new-build speculation are identified: the design of speculative urbanity, the refining of the liquidity of real estate assets, the spatialization of speculation, and the production of territorial investment platforms. Ultimately, the article discusses how the intensification of the construction of large-scale, mixed-use, and condominium projects in Global South cities is supporting a speculative turn of urban development in so-called frontier markets.

柬埔寨首都金边的房地产市场日益金融化。本文分析了城市开发和物业管理策略如何影响和加速金边的“新建投机”——新房地产开发项目的投机机制。批判性地理学和城市研究的主流观点认为, 房地产投机是虚构的、非生产式的资本积累形式, 而非有效的城市生产机制。通过分析混合用途、大型和公寓开发项目, 本文认为, 不仅房地产投机参与塑造了房地产开发, 房地产项目的生产和管理也“制造”了房地产的投机和房地产金融化的空间化。本文确定了“新建投机”的四个主要机制: 投机性城市的设计、房地产资产流动性的改善、投机的空间化、土地投资平台的产生。最后, 讨论了全球南方城市的大型、混合用途和公寓项目建设的集约化, 如何正在支撑一线市场中的投机性城市开发。

Este artículo analiza el modo como el desarrollo urbano y las estrategias de manejo de la propiedad configuran y aceleran la especulación de la nueva construcción (esto es, los mecanismos de especulación apegados al desarrollo de los nuevos emprendimientos inmobiliarios) en Phnom Penh (la capital camboyana), ciudad que está experimentando una creciente financialización de sus mercados inmobiliarios. Al discutir las concepciones dominantes de la especulación con la propiedad dentro de la investigación crítica en geografía y estudios urbanos, el artículo muestra que la especulación ha sido vista primariamente como un mecanismo ficticio e improductivo de acumulación de capital, más que mecanismo efectivo de producción urbana. Analizando el desarrollo de proyectos de uso mixto, a escala grande y en condominio, el artículo argumenta que la especulación de la propiedad no solo participa en el proceso de configurar el desarrollo inmobiliario, sino también que la producción y el manejo de los proyectos inmobiliarios “ingenian” la especulación en finca raíz y la lógica de especialización de la financialización inmobiliaria. Cuatro mecanismos principales de especulación de obra nueva se identifican: el diseño de la urbanidad especulativa, la refinación de la liquidez de activos inmobiliarios, la espacialización de la especulación y la producción de plataformas territoriales de inversión. En últimas, el artículo discute el modo como la intensificación en construcción de proyectos a gran escala, de uso mixto y de condominios en las ciudades del Sur Global, está impulsando un giro especulativo al desarrollo urbano en los así llamados mercados fronterizos.

Key Words:

• Asia
• geography of capital
• housing
• real estate
• speculation
• urban development

关键词:

• 亚洲
• 资本地理
• 住房
• 房地产
• 投机
• 城市开发

Palabras clave:

• Asia
• desarrollo urbano
• especulación
• geografía del capital
• inmobiliario
• vivienda

Acknowledgments

A preliminary version of this article has been already published in French in the journal Annales de Géographie: Fauveaud, G. 2022. Géographies de la spéculation et urbanisation du capital dans le Sud Global: Une perspective à partir de Phnom Penh au Cambodge. Annales de Géographie 746 (4):5–31. This version in English has been subsequently modified and the analysis developed further. I would like to thank the two anonymous reviewers for their help in this process, as well as Dolores Bertrais for her assistance with data collection.

Disclosure Statement

No potential conflict of interest was reported by the author.

Notes

1 Like Aalbers (2016), I define the financialization of real estate as a process in which real estate activities are increasingly influenced and determined by the finance sector and the economic practices associated with it. The financialization of real estate occurs through the spread of ways of thinking, techniques, practices, and discourses that have the effect of equating real estate assets with financial assets. It is driven by a wide range of both financial and nonfinancial actors working in the real estate sector or in associated fields (e.g., assessment, valuation, management, etc.).

2 For a useful critic of Marx’s understanding of the notion of speculation, see Bear (2020).

3 CapitaLand is listed on the Singapore stock market and is a major company specializing in real estate investment, development, and management. It manages a portfolio of assets worth more than US$150 billion and has representative offices in more than 200 cities around the world.

4 See https://knowledge-leader.colliers.com/editor/the-live-work-play-paradigm-is-incomplete/.

5 See https://www.oxleyworldbridge.com.kh/the-peak.

6 Mixed-use projects can also be run by different management companies, which will look after different categories of residential assets (offices, retail, residential, etc.) within the same project. In this way, management activities can be split to increase efficiency.

7 Compare http://www.idealproperty.com.sg/the-bridge-cambodia/.

8 Diamond Island, where development began at the end of the 2000s, is located on an infilled island right in the center of the city. Ultimately, 30,000 people are expected to live in the project.

Additional information

Notes on contributors

Gabriel Fauveaud

GABRIEL FAUVEAUD is Assistant Professor at the Department of Geography and Director of the Center for Asian Studies of the University of Montreal, C.P. 6128, succursale Center-ville, Montréal, QC H3C 3J7, Canada. E-mail: [email protected]. His research interests include urban development processes in Southeast Asia and Global South cities.