Cambodia Investment Review
Cambodia’s capital city is navigating a transitional phase in its property market, as investor caution, shifting trade dynamics, and an evolving development pipeline reshape market sentiment. According to CBRE Cambodia’s Phnom Penh Mid-Year Review 2025, released this month, trends vary widely across asset classes—with landed property doubling year-on-year while retail and condo segments remain under pressure.
The report paints a picture of a market recalibrating, where fundamentals like location, pricing strategy, and infrastructure proximity have become more critical than ever.
Office and Landed Property Stand Out Amid Tepid Liquidity
Despite subdued transaction activity across most sectors, landed property was a notable outlier. Transactions in the first half of 2025 more than doubled compared to H1 2024, as buyers gravitated toward low-density, suburban developments backed by infrastructure investments.
In the commercial space, Phnom Penh’s Grade A office supply saw continued expansion, buoyed by completions in central areas like BKK1 and Tonle Bassac. While rents remained stable, occupancy rates were closely tied to location and building amenities.
“Tenant demand has become more selective, favouring premium properties with flexible lease terms,” the CBRE report stated, adding that co-working models and hybrid setups continue to gain traction among SMEs and regional firms.
Condo Completions Surge, But Demand Trails
In contrast, the condominium sector faces ongoing headwinds. A wave of new launches returned in H1, and completions surged—further increasing supply and keeping sales competition fierce.
While prices have shown signs of stabilising, CBRE flagged lingering concerns about absorption rates, particularly in high-end segments. Affordable and mid-range offerings showed better resilience, but rising interest rates and tighter lending criteria are holding back broader market recovery.
One standout stat: CBRE recorded the completion of over 3,900 new condo units in H1 2025 alone, placing pressure on developers to differentiate through pricing, design, and promotions.
Retail Stalls While F&B Marches On
Retail development pipelines have slowed significantly, with quoting rents falling across most formats due to weak demand. However, one bright spot is food and beverage (F&B), which remains a resilient category.
F&B brands—especially quick-service restaurants and lifestyle cafés—continue to expand footprints, focusing on lifestyle malls and high-footfall neighbourhoods. This mirrors a broader regional trend of experiential retail anchoring tenant mix strategies in urban centres.
Serviced Apartments and Tourism Recovery Drive Up Rentals
Phnom Penh’s serviced apartment market is also rebounding. Grade A supply is on track for timely delivery, and average rental rates have increased in H1—supported by a resurgence in long-stay tourism and corporate leasing.
Notably, Phnom Penh’s H1 2025 tourist arrivals surpassed the same period in 2024, reinforcing expectations of a sustained tourism-led recovery. Locations near embassies, CBD zones, and the airport corridor remain the most sought after.
Industrial Sector Eyes Diversification Amid Tariff Pressures
CBRE’s report also highlights progress in Cambodia’s industrial and logistics sectors, despite lingering concerns from U.S. tariff measures on key export products. A new special economic zone (SEZ) is progressing, and import trends suggest early steps toward supply chain diversification.
This development complements broader government ambitions to transition Cambodia into higher-value manufacturing and logistics. BYD’s recent groundbreaking of an electric vehicle (EV) plant in Cambodia adds weight to this direction, as noted in Tech in Asia.
CBRE sees potential in growing sectors such as electronics and agro-processing—particularly if logistics infrastructure continues to improve under public-private partnerships.
Read More: CBRE Report – Cambodian Market Faces Uncertain Path Under Trump 2.0 Policy Shifts
Key Stats from the CBRE H1 2025 Review
- Landed Property: Transactions more than doubled year-on-year in H1 2025.
- Condo Completions: Over 5,000 new units added to the market in just six months.
- Retail Rents: Quoting rents declined across all formats, except for select F&B hotspots.
- Tourism Recovery: Tourist arrivals in H1 exceeded 2024 figures, with coastal areas in focus.
- Serviced Apartment Rents: Increased in H1, driven by strong corporate demand and tourism uptick.
Looking Ahead: Infrastructure and Investor Confidence in Focus
CBRE concludes that while the Phnom Penh real estate market faces challenges in liquidity and sentiment, long-term fundamentals remain intact—particularly in sectors that align with Cambodia’s infrastructure rollout and regional integration strategies.
Planned projects such as new expressways, rail links, and logistics hubs will be key to attracting foreign capital and sustaining real estate momentum in 2026 and beyond.
To access CBRE Cambodia’s full Phnom Penh Mid-Year Review 2025, contact the firm directly or explore their research offerings here.
