The Cambodia real estate market, particularly in Phnom Penh, is currently undergoing significant transformation driven by economic growth, infrastructure expansion, and shifting investor interests. Understanding these dynamics is crucial for stakeholders looking to capitalize on new opportunities and mitigate risks effectively. POINTER recently published their 2024 Annual Report for Phnom Penh Real Estate Market, sharing trends, insights, and opportunities for 2025.
Economic Drivers Fueling Real Estate Growth
Cambodia’s economy is demonstrating strong signs of recovery post-pandemic, supported by increasing foreign investments and infrastructure developments. In 2024, Cambodia is projected to achieve a robust GDP growth rate of 5.8%, signaling economic resilience and optimism within the market. The country’s successful inflation control measures have notably reduced inflation rates to an impressive low of 0.5%, stabilizing economic conditions and boosting investor confidence.
Foreign direct investment (FDI) continues to be a pivotal force driving the real estate sector, with notable contributions from China, South Korea, and Singapore. These countries, together with other regional investors, have significantly bolstered the market, accumulating a combined total of approximately $48.4 billion in FDI from 2018 to 2023. Such financial inflows underline international confidence and forecast continued growth in the Cambodia real estate market.
Phnom Penh’s Hospitality Sector: On the Rise
The hospitality sector has shown resilience, with several major hotel projects coming online in Phnom Penh, including well-known brands such as Radisson and Novotel. The completion of key infrastructure projects, notably the new Techo International Airport expected by 2025, will further amplify demand and visitor traffic, rejuvenating the hospitality industry.
Dynamic Office Space Landscape
Office spaces in Phnom Penh experienced a notable expansion, with approximately 100,000 sqm added in 2024. This surge highlights increasing business activities and new opportunities for investors and tenants. Despite a slight decrease in rental prices—partly due to supply outpacing demand—locations such as Chamkarmon and Daun Penh remain prime targets due to their strategic locations and vibrant business ecosystems.
Condominium Market Adjustments
The condominium sector saw a controlled slowdown, with a 42% reduction in new condominium units delivered compared to 2023. This reduction has helped balance market demand and alleviate potential oversupply. Interestingly, mid-range condos targeting local buyers dominate the market, underscored by their affordability and flexible payment options offered by reputable developers.
For those interested in exploring available properties or investment opportunities, POINTER offers comprehensive market insights and listings, particularly for those considering a Condo for Rent in Phnom Penh.
Serviced Apartments and Their Steady Growth
Serviced apartments in Phnom Penh have maintained steady growth, primarily in central districts such as Chamkarmon, Boeung Keng Kang, and Daun Penh. Although the sector saw minimal new supply due to construction delays, occupancy remains stable, with average rents experiencing a moderate 5% increase. This stability makes serviced apartments an attractive option for expatriates and business travelers.
Landed Properties – Quality Over Quantity
Phnom Penh’s landed property market experienced a substantial slowdown, with an approximate 80% drop in new unit launches compared to previous years. Despite this, strategic projects in southern Phnom Penh, bolstered by new infrastructures such as the Koh Pich-Koh Norea Bridge, are capturing strong market interest and are poised for long-term appreciation. Buyers are gravitating towards unique and well-designed residential communities that blend modern living with sustainable and minimalist designs.
Retail Market Innovations
The retail sector in Phnom Penh is redefining itself with innovative concepts and mixed-use developments. Although 2024 saw a 45% decrease in retail space supply compared to the previous year, newly opened projects with unique retail experiences, such as the Riverlight development in Koh Norea, are increasingly appealing to consumers. The retail market continues to be driven primarily by consumer demand for lifestyle, health, F&B, and household products.
The Booming Land Market
While land market trend is undergoing correction in most districts in Phnom Penh, some areas like Akreiy Ksatr notably standing out due to sharp price increases—up to 43.75% along main roads. This unprecedented growth is attributed to improved infrastructure and connectivity to central Phnom Penh, attracting both speculative investors and long-term strategic developments.
Strategic Investments and Future Opportunities
Considering these diverse dynamics within the Cambodia real estate market, stakeholders and investors should remain attentive to evolving market demands, infrastructure developments, and government policies influencing real estate growth. Whether considering residential, commercial, or industrial investments, the key lies in strategic selection based on location, infrastructure connectivity, and emerging market demands.
To delve deeper into detailed analyses and comprehensive insights on the evolving Cambodia real estate market, read more about our 2024 Phnom Penh Real Estate Market Report on our blog. Additionally, for tailored property services, expert consultations, and up-to-date listings, visit pointerasia.com.
