CBRE: Cambodian Real Estate Faces Divergent Trends Amid 2024 Economic Growth

• 24 October 2024
• Property Focus
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Cambodia’s real estate market in the final quarter of 2024 reveals diverse trends, marked by an estimated 5.8% GDP growth rate and 4.3 million international tourist arrivals in the first eight months, yet a decline in construction investment approvals to just USD 2.19 billion, involving fewer than 3,000 projects. The latest report by CBRE Research, based on data from the World Bank, Asian Development Bank, and the National Bank of Cambodia, underscores the sector’s mixed performance and ongoing challenges as of 17 October 2024.

Macroeconomic Overview

Despite global uncertainties, Cambodia’s economic landscape remains resilient, as evidenced by an estimated 5.8% year-on-year GDP growth for 2024. The tourism sector’s recovery, with 4.3 million arrivals in the first eight months, bolsters this outlook. However, approved construction investments, totaling just USD 2.19 billion across fewer than 3,000 projects, highlight persistent caution in the development sector, contrasting sharply with the stronger growth seen in previous years.

Real Estate Market Performance

Office Sector

The office market shows some improvement, with the occupancy rate estimated at 65.8%, reflecting a quarter-on-quarter rise, though levels remain below 2023 figures. Prime rents in Grade A office spaces saw a slight decrease to around USD 25 per square meter, down from USD 27, signaling stabilized demand amid ongoing economic recovery. Conversely, Grade B spaces saw a minor rental increase, now averaging USD 20 to USD 23 per square meter, indicating selective growth in tenant interest.

Retail Sector

Retail market conditions remain challenging, as the overall occupancy rate slipped slightly from 58.7% to 58.3%. Prime retail rents also showed variability, with roadside retail spaces declining to USD 22.1 per square meter, while supermarket rental rates remained consistent at approximately USD 24 per square meter. This stagnation reflects sector-specific headwinds, particularly as consumer behavior continues to evolve post-pandemic.

Condominium Market

The condominium sector launched over 970 new units in 2024, maintaining a steady high-end sales price of USD 2,714 per square meter. This stability indicates persistent interest in the market. At the same time, rental rates exhibited modest growth, with high-end condominium rents increasing by 2.3% and mid-range rents by 1.6%, signaling a gradual recovery in demand for urban living.

Borey Market

Borey developments, known for their appeal in Cambodia’s landed property market, saw over 250 new projects launched by the end of 2024. Single villa prices rose modestly to USD 1,177 per square meter, reflecting a 0.9% increase. Meanwhile, condominium prices within Borey projects ranged from USD 800 to USD 900 per square meter, up by 0.8%, suggesting a growing preference for suburban-style residential options.

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