Cambodia’s expanding logistics and industrial segments draw in international interest

Foundational industrial and logistics activities mean greater access to land borders, seaports, river routes, and airports  

According to a report by CBRE, the southern regions of Phnom Penh are receiving increasing attraction in becoming an important location for property segments, but industrial and logistics are still at a nascent stage.  

Phnom Penh Special Economic Zone (PPSEZ) is the heart of the region’s East-West Corridor, bridging Sihanoukville’s deep-sea port to markets like Singapore and Vietnam. 

If projects are constructed and managed in a similar professional manner, future industrial activity in the Southern Phnom Penh area is expected to reflect similar dynamics to PPSEZ.  

The total land area provides around 600 hectares of industrial area for various industries. Approximately 64 hectares of industrial land developed by Worldbridge was expected to complete in 2021, but the project has been delayed as of Q2 2021.  

Industrial and logistics activity in the southern region is still at a nascent stage, but the expanding infrastructure development will allow all other components of a manufacturing base to operate smoothly and cost-effectively.  

This foundational activity means greater access to seaports, land borders, river routes, and airports, and its rapid scaling is making the area increasingly appealing to domestic and international stakeholders.  

One of the most significant observations is the lack of Ready Built Factories (RBF) in Phnom Penh’s industrial market. RBFs are important for manufacturers seeking a smooth relocation, and by filling this non-existent supply, industrial developers can accelerate relocation times and draw in manufacturing tenants. 

More: Suburban living trend drives developers to expand outside of Phnom Penh

Moreover, “China plus One” is a low-hanging fruit that will push forward Cambodia’s industrial and logistics segments. Considering the nation’s China-friendly outlook, there might already be a large high-tech manufacturer looking for a new outpost.

It will also be interesting to observe how the Greater Mekong Subregion Economic Corridor ties into the progression of Cambodia’s industrial & logistics sector. The Asian Development Bank has projected significant reductions in customs formalities and export clearances, lower cost of transportation, and improved trade-related infrastructure. 

The Property Report editors wrote this article. For more information, email: [email protected].