Cambodia Investment Review
A recent report titled: âQuality Life-ing: Mapping Prime Residential Hotspotsâ in Asia Pacific by Knight Frank has underscored the increasing demand for both affordable housing and branded residences in Cambodia, as well as the broader Asia-Pacific region. With urbanization on the rise and the growing interest from international investors, Cambodiaâs housing market is poised for significant change. The report also highlights key trends in Asia-Pacific, where Hight Net Worth Individuals, expatriates, and investors continue to seek opportunities despite global economic uncertainties.
Growing Urbanization Fuels Demand for Affordable Housing in Phnom Penh
As Cambodia’s urban population steadily increases, the demand for affordable housing is expected to surge. While only 24.2% of Cambodia’s population currently lives in urban areas, this is projected to grow to 30.6% by 2030 and 41.1% by 2050. This trend is largely driven by young rural populations migrating to urban centers in search of better opportunities, contributing to a rise in domestic housing demand.
In Phnom Penh, areas such as Boeung Keng Kang 1 (BKK1) are seeing heightened demand for rental properties, thanks to their central location, tree-lined streets, and a variety of amenities such as cafes, retail stores, and healthcare facilities. This growing demand is also a result of rising disposable incomes and reduced borrowing costs, making properties in BKK1 attractive for both local and foreign investors.
Rental returns in the area are strong, offering net returns of around 6% to 7%, which is favorable compared to other regional markets. At the same time, there is an increasing preference for lower-density developments with more open-air spaces, outdoor areas, and wellness-oriented features within condominiums and housing projects.
Regional Trends: Affordable Housing and Prime Residential Markets
On a broader scale, the Knight Frank report highlights that the residential market in the Asia-Pacific region remains highly attractive to high-net-worth individuals (HNWIs), expatriates, and investors. Despite the global economic challenges, financial market volatilities, and higher interest rates in recent years, the region’s economic growth and increasing affluence are expected to sustain housing demand and price stability.
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Safehaven markets such as Singapore, Australia, and Japan continue to perform well, with improvements in urban infrastructure and government incentives helping to attract foreign talent. By 2030, 19 megacities, each with populations of over 10 million, are expected to emerge across the Asia-Pacific region, further driving housing demand, especially in prime residential areas.
As the regionâs middle-class population is projected to reach 1.7 billion by 2030, governments across emerging markets are expected to address the need for affordable housing through increased supply and policies aimed at supporting the growing middle class.
The Rise of Branded Residences in Prime Residential Markets
Another key trend identified in the Knight Frank report is the growing demand for branded residences, particularly in prime residential markets across the region. These luxury developments, often associated with prestigious global brands, offer an elevated lifestyle with high-end services and amenities, including concierge services, fitness centers, and exclusive security.
Countries like Australia, India, and Thailand are experiencing rising demand for such branded properties, which are particularly appealing to both local and international investors seeking secure investments and enhanced living experiences. According to the Knight Frank Global Branded Residences Report, up to 45% of buyers in Australasia are willing to pay a premium for branded residences, reflecting a growing preference for luxury homes coupled with top-tier services.
In Cambodia, the demand for such branded residences is expected to rise as the market matures and attracts more international investors, further diversifying the country’s real estate offerings.
It was recently announced that Ritz-Carlton Phnom Penh, a dual-branded hotel and residence, will be strategically located on Norodom Boulevard, one of the cityâs most sought-after addresses. This development will not only contribute to the transformation of Phnom Penhâs skyline but also offer a blend of high-end residences, office spaces, and a luxury hotel, setting a new benchmark for luxury hospitality in Cambodia. Knight Frank Cambodia was a key player in conducting the market research behind the business case.
Cambodia’s Housing Market Attracts International Investment
The Cambodian real estate market has seen significant international investment, with key countries such as Japan, Singapore, Korea, Malaysia, China, Taiwan, and Hong Kong showing strong interest. Ross Wheble, Country Head of Knight Frank Cambodia and a prominent figure in the local real estate sector, noted that developers are increasingly adding wellness-oriented features to their projects. While these features are often used as unique selling points rather than being driven by explicit buyer demand, they reflect a broader trend toward healthier, more sustainable living environments.
âInvestment has been pouring in from key countries such as Japan, Singapore, Korea, Malaysia, Chinese mainland, Taiwan, and Hong Kong SAR, reflecting strong international interest in our market,â Wheble said.
With Cambodiaâs housing market expanding and becoming more sophisticated, it mirrors broader regional trends, signaling that both affordable housing and luxury branded residences will continue to shape the future of real estate in Southeast Asia.