Cambodia’s Real Estate Market Faces Mixed Signals Amid Regional Benchmarks

• 27 January 2025
• Local News
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Cambodia’s commercial real estate market reveals significant challenges with office occupancy rates at 65.1%, well below the international benchmark of 85-90%, while maintaining premium rents at $27 per square meter, according to the “Fearless Forecast” report presented by CBRE Cambodia Chairman Marc Townsend at Novotel Phnom Penh BKK1 on 14 January 2025.

The retail sector faces similar headwinds, with occupancy rates at 61.8%, substantially lower than the global standard of 90-95% for healthy retail markets. Despite these occupancy challenges, prime retail spaces continue to command rates of $22.6 per square meter, suggesting a potential misalignment between market realities and pricing strategies in Cambodia’s evolving real estate landscape.

The condominium sector’s upcoming supply of 3,200+ units warrants careful monitoring, with current high-end sales prices at $2,650 per square meter positioning slightly below regional benchmarks. For comparison, luxury condominiums in Bangkok average $6,500 per square meter, while mid-range units in Phnom Penh typically command $2,200 per square meter, suggesting the market is maintaining competitive pricing within the regional context.

The serviced apartment segment’s addition of 240+ units appears measured, with Grade A rents at $19.3 per square meter. This sector shows particular promise, as research indicates successful serviced apartments typically achieve occupancy rates between 88% to 92% in prime Asian locations, suggesting room for growth in Cambodia’s market.

These market indicators suggest Cambodia’s real estate sector is navigating a crucial phase of market maturation. With office and retail occupancy rates significantly below international benchmarks – where healthy markets typically see vacancy rates of only 10-15% for office and 5-10% for retail space – stakeholders may need to implement strategic adjustments to improve market fundamentals.

“The current market dynamics indicate a need for strategic recalibration rather than immediate concern,” notes Marc Townsend, emphasizing the importance of market correction mechanisms. For the condominium sector, maintaining price competitiveness while ensuring quality remains crucial, especially as regional luxury markets continue to show strong performance. Property owners across all sectors may need to consider various strategies to improve occupancy rates, including potential rental rate adjustments, enhanced property amenities, and more aggressive marketing approaches to align with international market standards and attract quality tenants in this competitive landscape.

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