2025-08-18-莱坊-Cambodia_Real_Estate_Highlights_H1_2025页_1mb

Cambodia Real Estate Market Summary - H1 2025

Core Content Overview

This summary outlines the key trends and developments in Cambodia's real estate market for the first half of 2025, focusing on Phnom Penh and Siem Reap. It highlights economic challenges, supply and demand dynamics, and future outlooks for various sectors including office, retail, hotel, and serviced apartments.

Economic Snapshot

• GDP Growth Forecast: The World Bank revised its 2025 GDP growth forecast to 4.0%, down from 5.5%, due to weakening external demand, trade policy uncertainty, and rising non-performing loans (NPLs: 7.9% for banks, 9% for microfinance).
• Trade Challenges: Exports to the U.S. increased to over $4 billion in the first five months of 2025, up 27% y/y, but faced 49% tariffs after Trump's announcement, later reduced to 36%.
• Investment Activity: The Council for the Development of Cambodia (CDC) approved $4.2 billion in FDI projects in the first five months of 2025, a 90% y/y increase, while domestic investment dropped by 96.7%.
• Tourism Recovery: International arrivals reached 1.8 million in Q1 2025, a 16.1% increase, but are still below 2019 levels. The border closure with Thailand in June caused a 30% decline in tourist arrivals.

Economic Outlook

• Despite the 4.0% GDP growth forecast, the global economic outlook has weakened, leading to lower growth expectations and reduced investor sentiment.
• Global trade tensions and geopolitical conflicts (e.g., Israel-Iran, Cambodia-Thailand) are expected to impact long-term growth.
• Domestic challenges include a slowdown in economic activity and rising inflation (3.7% y/y in March 2025), driven by higher food prices and border closures.

Phnom Penh Office Sector

Supply & Demand

• Total Supply: Increased to 1,015,380 sq m, a 5% y/y growth.
• Grade Distribution:
  • Grade B accounts for 49% of the market.
  • Grade A and Grade C represent 23% and 28%, respectively.
• Location Distribution:
  • 80% of existing office supply is located in the city centre.
  • 24% in Chamkarmon, 23% in Daun Penh, 13% in 7 Makara, 12% in Sen Sok, and 11% in Boeung Keng Kong.
• Future Supply:
  • Expected to reach 1,557,098 sq m by 2028, a 53% increase.
  • 88% of future supply will be Grade A, with 12% as Grade B.
  • 94% of future supply is located in the city centre, with only 6% in suburban areas.
  • Chamkarmon will account for 32% of future supply, followed by Daun Penh (25%), 7 Makara (23%), and Boeung Keng Kong (11%).

Prices & Rentals

• Prime Office Rents: Stabilised at US$21 per sq m per month.
• Rent Decline: Prime office rents have declined by 16% since 2020.
• Vacancy Rate: Rose to 26%, up 8 percentage points from 2024.

Outlook

• Short-Term Challenges: Vacancy rate increase and supply-demand imbalance.
• Long-Term Prospects: Flexibility, innovative office solutions, and strategic locations will be key.
• Market Dynamics: External factors such as tariffs and border issues will influence future demand and investment.

Phnom Penh Retail Sector

Supply & Demand

• Total Supply: Reached 873,201 sq m, a 1% y/y increase.
• Grade Distribution:
  • Prime Retail: 63% of the market.
  • Secondary Retail: 37%.
• Location Distribution:
  • 61% in suburban areas, 39% in city centre.
  • Sen Sok (31%) and Meanchey (23%) are the top districts, followed by Chamkarmon (16%) and 7 Makara (10%).
• Future Supply:
  • Expected to reach 1,147,955 sq m by 2027, a 31% increase.
  • CAGR: 10% from 2025 to 2027.
  • Retail per capita: To rise to 0.43 sq m by 2027 with a population of 2.6 million.

Prices & Rentals

• Prime Retail Rents: US$18–26 per sq m per month.
• Secondary Retail Rents: US$9–20 per sq m per month.
• Vacancy Rate: Increased to 37.8%, up 4.8 percentage points from 2024.

Outlook

• Supply-Demand Imbalance: New developments are outpacing demand, leading to high vacancy rates.
• Short-Term Strategy: Landlords are advised to diversify tenant mix and offer flexible leasing options.
• Long-Term Growth: Expected in districts with population and job growth, particularly young families and infrastructure development.
• External Factors: Global economic volatility and border conflicts are expected to impact the retail sector.

Phnom Penh Hotel Sector

Supply & Demand

• Total Supply: Reached 16,372 rooms, a 6% y/y increase.
• Classification Distribution:
  • Luxury & Upper Upscale (5-star): 26%.
  • Upscale & Upper Midscale (4-star): 32%.
  • Midscale & Economy (3-star): 42%.
• New Developments:
  • Wyndham Grand Phnom Penh Capital (Luxury & Upper Upscale) added 400 rooms.
  • Merton Holiday Inn (Upscale & Upper Midscale) added 300 rooms.
• Location Distribution:
  • City Centre: 83% of the hotel supply.
  • Suburban: 17%.

Occupancy & ADR

• Luxury & Upper Upscale Occupancy: Increased to 42.0%, up from 38.6% in 2024.
• ADR: $160 in Q1 2025, down from $162 in 2024 and $169 in 2023.
• Future Supply:
  • Expected to reach 19,483 rooms by 2028, a 19% increase.
  • 95% of future supply will be in City Centre districts.
  • Daun Penh will account for 38%, followed by Boeung Keng Kang (28%) and Chamkarmon (16%).

Outlook

• Short-Term Challenges: Border closures and tariff policies will reduce tourist arrivals and occupancy.
• Long-Term Growth: New infrastructure projects (e.g., Techo International Airport) are expected to boost demand.
• Market Trends: Luxury amenities and personalised experiences will enhance guest satisfaction and revenue.

Phnom Penh Serviced Apartment Sector

Supply & Demand

• Total Supply: Reached 8,975 units, a 7% y/y increase.
• Location Distribution:
  • 93% in City Centre districts.
  • 7% in suburban areas.
• New Developments:
  • Wyndham Grand Phnom Penh Capital and Grand Mansion added 565 units.
  • These units are designed for longer-stay guests, offering prime locations, accessibility, and diverse amenities.

Outlook

• Short-Term Stability: Despite increased supply, the sector remains stable.
• Challenges in H2 2025: Expected to face greater difficulties due to economic and geopolitical uncertainties.
• Strategic Development: Focus on prime locations and amenities will continue to attract investors and residents.

Summary of Key Sectors

Conclusion

The Phnom Penh real estate market in H1 2025 shows mixed performance across sectors. While the office and hotel sectors have seen growth, the retail and serviced apartment sectors are confronting challenges. Economic uncertainty, trade tensions, and geopolitical issues are influencing market dynamics, but long-term opportunities remain in place due to demographic growth, infrastructure development, and increased disposable income.