Phnom Penh’s commercial real estate booms amidst fluctuations in retail and office spaces

High-end locations gain traction as Cambodia’s property sector sees revival and new investor profiles emerge 

The broader Khmer construction sector is on the cusp of revival. saiko3p/Shutterstock

Phnom Penh’s commercial real estate market is going through a significant transformation, with high-end brands and multinational corporations (MNCs) increasingly favouring up-market locations and grade-A office properties. 

According to the CBRE Cambodia Research published in the Khmer Times, the first quarter of 2024 saw a nine percent increase in commercial rentals in high-street areas, compared to a flat growth in shopping malls and a decline in community mall rentals. These high-street rentals range between USD26 to USD33 per square metre per month, reflecting the growing demand for premium visibility and quality among retailers.

Sorn Seap, the President of the Cambodian Valuers and Estate Agents Association (CVEA) and the Chairperson of the PropertyGuru Cambodia Property Awards, emphasised the market’s maturation and the resulting focus on quality. He explained that this trend extends to office spaces, where there has been a 2.9 percent increase in grade-A office property rentals. An additional 171,000 plus sqm of office space is expected to become available in 2024, raising questions about potential impacts on rental rates if supply exceeds demand. 

Moreover, the broader Khmer construction sector is also on the cusp of revival, with USD5 billion in approved projects for 2024. Industry insiders told the Khmer Times that this growth can be attributed to the country’s expanding middle class and rising demand for quality housing and commercial projects. Large-scale infrastructure developments, such as new roads, bridges, airports, seaports, and public transportation systems, are expected to further boost the real estate market. 

The Q1 report of CBRE Cambodia highlighted optimism about real estate growth, noting office occupancy at 62.2 percent and retail occupancy at 63.4 percent. In addition, 448 landed property projects were completed, signalling robust development activity. The upcoming infrastructure projects, including the PP-Bavet Expressway, Moradok Techo Flyover, Chak Angre-Prek Pra Bridge, and Techno International Airport, are anticipated to enhance the real estate landscape. 

The property investor profile in Cambodia is also evolving, revealed Khmer Times in another report. While Chinese and Southeast Asian investors previously dominated the market, a growing number of Western and European buyers are now entering the scene. Peter Guboglo, CEO of Phnom Penh-based real estate agency Investor In Property Co., Ltd., noted a significant shift from Chinese investments to those from the USA, Europe, and Russia. These investors are drawn by Cambodia’s dynamic GDP growth, competitive property prices, and favourable ownership mechanisms for foreigners. 

Guboglo highlighted that Western buyers are now outweighing inquiries from traditional Asian investors, a trend not seen in previous years. Increased international awareness of Cambodia’s real estate market is driving this shift, with foreign investors viewing Cambodian condominiums as offering better profit potential compared to properties in their own countries or regional hotspots. 

Related: The 9th PropertyGuru Cambodia Property Awards begin search for the kingdom’s finest real estate

The Cambodian real estate market represents an early growth cycle investment opportunity, with promising short, medium, and long-term returns on rental and property appreciation. This potential is further enhanced by the country’s recent improvements in foreign ownership rights.

The property sector’s dynamism is also evident in the accolades received by the leading commercial developers at the PropertyGuru Cambodia Property Awards 2023. Mean Chey Avenue by RM Commercial Co., Ltd. won the Best Retail Development and Best Retail Architectural Design distinctions, while Bay of Lights by Canopy Sands Development secured the Best Leisure Development and Best Leisure Architectural Design titles. Meanwhile, the Best Shophouse Development honour was granted to La Maison Plaza by Cambestate Management Co., Ltd. and the Best Office Architectural Design award was presented to Maline Office by Maline Office Co., Ltd. These recognitions highlight the high standards and innovation within the Cambodian real estate market. 

As Cambodia’s real estate sector continues to evolve, the focus on high-quality, strategically located properties is likely to remain a key driver of growth. With significant infrastructure projects underway and a diversifying investor base, the market is poised for sustained expansion and increased international interest.

Know any award-worthy residential, commercial, or industrial projects in the country? Nominate them for the 9th annual PropertyGuru Cambodia Property Awards on or before 12 July 2024. To know more, visit 

Gynen Kyra Toriano, Digital Content Manager at PropertyGuru, wrote this article. For more information, email: [email protected].