June 18, 2008 / 5:50 AM / in 9 years

UPDATE 1-S.Korea GS Construction to invest $982 mln in Cambodia

(Updates with background)

SEOUL, June 18 (Reuters) - South Korea's GS Construction (006360.KS) said on Wednesday it planned to invest 1 trillion won ($982 million) to develop an international finance complex in Cambodia.

South Korea has emerged as one of the leading investors in the war-scarred southeast Asian nation, where the economy is enjoying near double-digit growth, based in large part on a boom in the construction, property and garment manufacturing sectors.

GS said in a filing to the Korea Exchange the project was due to end on March 17, 2012.

The GS project comes hard on the heels of "Gold Tower 42", a $300 million South Korean venture that opened its pre-sales offices in January.

At 42 stories high, Gold Tower 42 will be three times higher than Phnom Penh's current tallest building when it is complete, also in 2012.

While the outlook for the garment industry and tourism appears solid, some analysts have expressed concerns about the real estate market, where prices are spiralling in a country that remains one of Asia's poorest despite its recent growth.

Figures from Bonna Realty, a leading estate agent, suggest the price of prime Phnom Penh land doubled last year to $3,000/square metre, up from just $500 in 2000.

By contrast, land in Bangkok's downtown Silom district is $5,000/sq m, while Ho Chi Minh City, the commercial hub of neighbouring Vietnam, prices can be as high as $15,000. ($1=1018.5 Won) (Reporting by Lee Jin-joo and Ek Madra in Phnom Penh; Editing by Ed Cropley and Lincoln Feast)

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