Here is all you need to know about Phnom Penh - the city specs, the key features and the latest real estate prospects and trends, brought to you by Cambodia’s home of real estate: Realestate.com.kh!
Situated where both the Tonlé Sap and Mekong Rivers meet, Phnom Penh has been capital city of the kingdom of Cambodia since the mid-1860s. Since these humble beginnings, Phnom Penh has grown to become the nation's unquestionable demographic and economic center, as well as the hub for foreign investment, security, politics and diplomacy.
Phnom Penh, in 2015, was second only to Laos in Southeast Asia for the fastest rate of urban spatial extension, as indicated by the World Bank. An average growth rate of around 7 percent year-on-year for Cambodia has triggered an economic boom in Phnom Penh, and the city now offers all you would expect from an Asian metropolis. From expansive shopping centers, malls, skyscrapers and five-star hotels, to a variety of eateries and eclectic F&B options, and a vibrant nightlife; Phnom Penh is drawing guests from all around the world.
Extravagant modern buildings across Phnom Penh are changing the capital into a playground for a new generation of Khmers in the emerging middle class, international investors and local elite. Yet still - wealth distribution remains wholly unequal in Cambodia, meaning local tastes are ultimately decided by associated costs.
According to the World Bank, around 21 percent of the population live at or below the poverty line of less than USD 1.50 per day; over 50 percent live within the vulnerable to poor category spending up to USD 2.60 per day; and approximately 20 percent of Khmers are considered to be middle class. A mere 3 percent are considered to be “prosperous,” meaning they are able to spend upwards of USD 5.00 per day on goods and services. Nevertheless, as this middle class continues to grow, consumer products and services are growing at a rate previously unseen in the country, and more so in Phnom Penh than anywhere else.
Originally the capital of Cambodia and birthplace of the Khmer Empire was Siem Reap. In the 14th century historical records reveal that the Khmer king at the time, King Pohea Yat, founded a new capital in Phnom Penh.
Legends tell the story that Phnom Penh took its name from a local lady, named Lady Daun Penh, who apparently found 4 statues of the Buddha inside a tree floating on the Mekong River. She took her discovery to be profound and decided that a new capital should be established away from the Angkor capital. She placed these sacred objects in a shrine on a small hill to keep them safe, now known as Wat Phnom.
The city has long been renowned for its beautiful architecture and attractions. Once a French colonial urban center, Phnom Penh has been admired as one of the loveliest South East Asian cities because of its characteristic wide roads, pretty gardens and exquisite stately homes. For these reasons, the city was titled “the pearl of Asia” in the 1920’s.
Over the following four decades, Phnom Penh experienced rapid growth with the building of railways to Sihanoukville and the opening of the first international airport, Phnom Penh International Airport. Phnom Penh's infrastructure saw major modernization under the rule of King Sihanouk for much of the early to mid-1900s. However, in the 1970’s, within the shadow of America’s Vietnam War, this vibrant metropolis came under siege by Pol Pot’s Khmer Rouge, and his army took control of the Phnom Penh and ordered over two million of its inhabitants to evacuate. The city was left to resemble a ghost town.
To cut a long and complicated story short, the Khmer Rouge were finally driven out of Phnom Penh by a liberation army from Vietnam in 1979 and people began to return to live in the city. However, the Khmer people continued to experience exploitation and extreme hunger under the Vietnamese occupation.
After the war, land titles for the entire country had been destroyed or lost, meaning those that returned to Phnom Penh essentially staked claims to property than was uninhabited. Later in the 1990s to early 2000s, with funding from various institutions including the World Bank, the land title system was renewed in Cambodia. But still today, the effects of the war impact land ownership rights and disputes continue.
In 1993, Norodom Sihanouk was restored as King of Cambodia after returning from exile in China, but all power was put in the hands of the democratic government established after the UNTAC sponsored elections. Samdech Hun Sen became prime minister, a role he still holds to this day - now representing the longest reign for a non-royal leader in the Southeast Asian region.
A period of reconstruction begun after the end of the war, spurred by the relative stability of the government post UNTAC, and various opportunities for new foreign investment and aid support by countries including France, Australia, and Japan, to name a few of the major providers. Meanwhile, the internationally-endorsed new government passed a variety of investor friendly laws which opened the Cambodian economy to external influences to an extent unseen in neighboring nations. A free market economic model was firmly emplaced.
The US dollar was implemented as an official currency, providing an additional level of economic security alongside the national currency, the Khmer Riel. This dollarization remains in place today; however the National Bank of Cambodia has developed policies to encourage the use of the Khmer Riel with a view towards future de-dollarization as an attempt to eventually regain full control over monetary policy.
In the early 90s, huge development loans were made to the Cambodian government from institutions such as the Asian Development Bank and the World Bank to fund projects supporting infrastructure development, such as clean water supply, roads and other infrastructure - much of which poured into Phnom Penh.
The population grew extremely quickly with this new stability. The 1998 census estimated Phnom Penh's population at 862,000, and the results of the 2008 census show this had risen to 1.3 million. Nowadays, the population of Phnom Penh has grown significantly to reach approximately 2.5 million.
Economy and Main Industries
The main economy of Phnom Penh is based on commercial interests such as garments, trading, and small and medium enterprises.
While the CBD of the city is home to a host of banks and trading ventures - the outskirts of Phnom Penh, spilling over into Kandal province, is defined by huge zones of manufacturing factories and other industry. These low-skill sectors, along with agriculture, have remained Cambodia’s primary growth engine since the country reformed after the war.
In 2015, primary industries of garment and footwear production contributed to 26.1 percent of the total economy of Cambodia. Agriculture contributed 29 percent and service sector made up 39.4 percent of the economy. The main agricultural export products include rice, rubber, maize, cassava and palm oil. Secondary industries make up around 22 percent and tertiary industries represent 38 percent of the total economy.
Amongst the tertiary industries, tourism-related activities are the most valuable to the sustained growth of the Cambodian economy.
In recent times, construction has also become a key engine of growth for the Phnom Penh economy. Cambodia’s trade activities remain robust with some of the major destination countries for exports being the USA, Hong Kong, China, Europe, Canada, and Vietnam. The Everything but Arms agreement supports and offers tax-free trade between Cambodia and Europe.
The major import destinations of Cambodian products include the neighboring countries of Vietnam and Thailand, along with Hong Kong, China, and Taiwan. The kingdom's primary export is clothing apparel and footwear, which represents more than 80 percent of total exports. Cars, textiles and energy products make up the country’s major imports. In the past few years the property business has been booming too, with rapidly increasing real estate prices across the capital of Phnom Penh.
The boom in construction throughout Phnom Penh has naturally fed into the real estate sphere, where new development offerings targeting almost all economic strata’s of society come online daily.
Tourism is also a major contributor to Phnom Penh’s economy as more shopping centers and attractions open, making Phnom Penh one of the major tourist destinations in the country along with Siem Reap and Sihanoukville.
One factor influencing the continuous economic growth of both Phnom Penh and greater Cambodia is that it is an attractive environment for foreign investment. In 2015, Cambodia received over USD 4B in foreign direct investment (FDI) and has an expatriate population of over 78,000, most of which reside in Phnom Penh.
Realestate.com.kh suggests that Cambodia is attractive destination for FDI due to the availability of low-priced labor, fast urbanization, an growing middle-class, easy free and open policies for foreign businesses, English language as the main business language, appealing tax incentives and import/export duty exemptions, continually improving infrastructure and logistical networks, and the predominance of the US dollar.
With Cambodia’s integration into ASEAN, Phnom Penh is particularly well located, surrounded by robust regional economies that are increasingly outsourcing manufacturing operations to the Kingdom. Cambodians are also more and more connected to the global community through access to technology via high mobile phone penetration, with Phnom Penh being the epicenter of this evolution.
In 2015, Cambodia had over 5 million internet users, which represents one third of the current population. Since 2010, foreigners have also been allowed to own apartments and condominium units in Cambodia - but not land, and, accordingly, not the first floor of buildings.
Immediately after the passing of the law, tax revenues from property transactions rose 60% to around $19.5 million in 2010, from just $12.2 million in 2009.
This foreign ownership law has aided Phnom Penh’s growth hugely, and a range of properties being built are directly aimed at this foreign ownership market. Foreigners can easily hold land on long renewable leases and also through local majority-owned companies that have been incorporated in the kingdom.
These structures are more secure compared to other legislation in other neighboring countries where foreign-owned land is forbidden.
Key Areas of Development
Beoung Keng Kang (BKK), in the Chamkarmon district, boasts the highest prices in Phnom Penh with land prices reaching up to $6,000/m2.
Previously, home villas were sought after by families wishing to live in this district, but now most of these villas have either been demolished and sold to developers, or transformed into boutique hotels or restaurants.
Other upcoming Phnom Penh residential property areas include the west and south of the city generally. These locations are very close to central Phnom Penh yet property prices remain considerably cheaper. In addition, growing congestion and a lack of parking in and around the city center is increasingly causing problems for inner-city Phnom Penh residents. The Phnom Penh Master Plan 2035 seeks to dictate the urban planning for the expansion of the city and construct new infrastructure to accommodate the growing population.
Until now, the city has had no zoning regulations of note nor identifiable urban development planning.
Commercial property and office space trends:
In the past, in a city without a skyline, villas were the preferred type of property for office space.
However, in recent times businesses are looking for more suitable properties, designed for business. The demand for first-class and mid-level office space throughout Phnom Penh is growing, with a variety of new high-rise projects being available or due to be completed in the next years. These new office complexes are often demolishing vintage villas, flats and other types of classical real estate.
Grade B and C are popular choices the locals as Grade A office space is generally too expensive for most local businesses.
The growth of the Phnom Penh commercial property market are only set to continue in the future, especially since Cambodia has joined the AEC, and many developers are aware of this emerging business class.
Retail and shopping property trends:
The Phnom Penh retail property market is undergoing vast changes, and these changes are altering the face of the city. International brands are joining the burgeoning Cambodian market faster than ever. Some of these new brands are specifically chasing the increasingly available aspirational middle class dollar; others are focusing on the Khmer and expat high-end retail market.
Meanwhile, local retailers continue to grow and expand their operations in leaps and bounds. Given the relative limitations of the majority of the population’s incomes however, the Phnom Penh retail market still has much room for growth and expansion as incomes start to rise.
In reply to this growth, the Phnom Penh retail properties market is growing quickly and demand for retail space in certain areas of the city is driving rental prices higher than ever before. Yet, inner city congestion, lack of parking and lack of affordable housing options inside the CBD is redefining the preferred retail zones around town, adjusting the Phnom Penh real estate market accordingly.
Corner spaces in BKK1, Tonle Bassac and Duan Penh are very popular for retail spaces, especially food and beverage, because corner properties have the benefit of at least a number car parking spaces which is usually hard to come by in the city.
Parking is a real and growing issue in high density areas of Phnom Penh as more and more vehicles get on the road and more people move into, or works, in popular urban areas. Well-known brands are increasingly seeking properties on the corner locations in the Chbar Ampov area as they have realized that it's where they will find the growing middle-class Khmers.
Congested traffic is making it harder for consumers to come into central Phnom Penh to shop. Similar retail development is happening for similar reasons in the western and northern parts of the city, around Sen Sok and Phnom Penh Thmey, next to central Tuol Kork.
Another trend is in regards to the advent of high quality shopping centers and malls. Cambodia’s first international shopping mall opened its doors in June 2014: Aeon Mall. Every weekend the mall is full of shoppers, many of whom travel from the provinces to experience the nation’s first international standard shopping center. Aeon has since seen high demand for store space from both international and local retailers.
A new breed of international franchisers, who have for many years ignored the Cambodian market and refused to enter it, see the attractiveness of occupying slots in complexes such as Aeon Mall as it reflects international standards of retail space and retail space management. The new mall has convinced some of these franchisers that opportunities exist and that there are viable spaces for them to locate their brand.
Parkson Mall on Russian Boulevard is the next of its kind to open in Phnom Penh, and is currently under construction. Lion City will follow not long after. Aeon 2 is also now in the pipeline. TK Avenue is another well known, well-established and modern shopping plaza and cinema complex, located in Toul Kork. Phnom Penh
Condo and new development market trends:
The condominium market in Phnom Penh continues to expand, with early investors in centrally located developments enjoying appreciation of up to 30% from off plan purchases. High-end condominium development looks set to continue in prime residential locations, with developers also looking to offer luxury projects outside of traditional residential districts.
While the condo market was originally dominated by foreign investors, Khmer buyers are beginning to demand condos, predominantly for investment purposes and rental returns. This has led to a trend of local developers offering lower-range condo development projects to the market, and these types of developments range of $30-60,000 per unit off-plan and are being bought primarily by local buyers.
Domestic demand is a key element of a successful condominium project for any developer in Cambodia, due to foreign ownership of an individual building (strata law) being restricted by law to 70%.
Another trend we will see more and more of are mixed-development complexes, including condo, office space and retail. Realestate.com.kh suggests that the reason for this is that developers are aware of a potential oversupply in the pure-condo market in 2018-19 and are thus hedging their bets with mixed development offerings.
Increasing investment from Singaporean, Japanese, Korean, Hong Kong and Chinese residents continues to grow in Cambodia, and the comparatively high yield guaranteed by many developers is still attracting overseas purchasers who see positive chances for appreciation in Cambodian developments compared to their slowing home markets.
Thus far condo developers in Cambodia have focused on the high-end market, and to some extend the upper middle class, as these two markets represent the lowest hanging fruit.
Still, suggests Realestate.com.kh, a massive demand exists for quality, affordable housing development in Cambodia suited to the needs of the lower-middle class and lowest income earners, especially in expanding urban centers. Without any proposed government intervention in the market for this demand, this appears to offer a great opportunity to developers able to cater to this large demographic.
To cope with the city’s expansion and rapid growth in vehicles, more infrastructure projects are expected to be completed in Phnom Penh before 2020.
At the grand opening of the 5 January Overpass (Techno Overpass), Prime Minister Samdech Hun Sen approved several more projects for the capital.
After acknowledging the ongoing congestion at the Kbal Thnal Sky Bridge, construction will start soon on an additional curved overpass and underground road near the existing bridge. The US$10 million project will see an 810 meter overpass and a 606 meter underground built by the Overseas Cambodian Investment Corporation (OCIC). This is a great boost for Phnom Penh infrastructure!
An underpass at the junction of Russian Federation Blvd and Preah Monivong Blvd (PKC stop) will also be constructed by OCIC to ease traffic in the vicinity. The plan features a 340 meter long, 15 meter wide road running through a 5 meter high tunnel. Following a successful soil analysis conducted on January 8, construction will commence later this year.
Another overpass will be erected at the congested intersection between Russian Federation Blvd and Hanoi Street reflecting the significance of Russian Federation Blvd as the main artery connecting the city center and the airport. The bridge is to be 611 meter long and 16.5 meters wide and will be built by Chinese Shanghai Construction and financed by the Chinese government.
Phnom Penh will see also its first elevated expressway that will stretch 13km above the existing rail line connecting Preah Monivong Blvd and the international airport. The toll road will help ensure air passengers do not miss their flights due to congestion. While City Hall previously announced that the project is being developed by a Chinese investor, it appears that OCIC is also negotiating with City Hall to win the bid for this project.
Muhibbah Engineering (Cambodia) Ltd has also claimed to have won the bid to build a $200-million expressway connecting Phnom Penh’s downtown to National Road 4 and the capital’s airport. Stretching over 14km, the 24 meter wide, four lane highway will also run parallel with the current rail track that connects Toul Kork Roundabout to National Road 4.The Phnom Penh infrastructure project will commence soon once compensation to affected households has been completed this year.
A 220km highway linking Phnom Penh and Ho Chi Minh City worth around US$2.2 billion proposed by the Japanese International Cooperation Agency (JICA) has also been announced with completion hoped for by 2030.
The capital will also see construction of a second ring road that will run 16.67km across two lanes from Russian Federation Blvd to National Road 2 across the districts of Dangkor, Sen Sok, Meanchey heading south to Ta Khmao town, another boost for Phnom Penh infrastructure. The road will be built by Chinese Shanghai Construction via Chinese government financing. Built with 20cm thick concrete, it will be 23 meters wide with a 1.5 meter drainage system on both sides. The exact starting and completion dates for all these projects are not yet known.
While the government is pinning its hopes on more infrastructure solving congestion, urban planning expert Dr. Van Vat told the Phnom Penh Post that infrastructure projects alone can’t mitigate the jams. “To avoid this problem, we need to have a detailed plan for each district as to which roads need to be expanded in the next five or ten years, and which roads will have overpasses,” he stressed, adding that, “If we don’t do that, the congestion issue will continue.”
Dr. Vat also requested the government to limit vehicle imports and design and implement appropriate traffic light systems.
The Phnom Penh water supply has improved significantly in terms of access and service quality between the years of 1993 to 2006, and this system has continued to get better. The city's water main water sources are the Mekong, Tonle Sap and the Tonle Bassac rivers. The Phnom Penh Water Supply Authority (PPWSA) has in fact been given international awards such as the 2006 Ramon Magsaysay Award and the 2010 Stockholm Industry Water Award for their water supply services in Phnom Penh.
However, the quality of water reaching your home is ultimately dependent on the piping systems that carry it there. For this reason, some homes have high levels of heavy metals and other impurities in their tap water when tested, despite the quality of the original water source. Water filtration systems are readily available.
Roads and Bridges: A host of new roads and bridges are also bringing the city forward, many being the result of large international development funds, and opening up new areas of land for urban development - a prime example of this being Chroy Changvar peninsular. Key road transit routes to Siem Reap and Sihanoukville, and also to the Thai and Vietnamese borders are also improving yearly.
Weather, Climate and Geography
The capital of Cambodia, Phnom Penh, lies south of the country and is enveloped by Kandal Province; existing like a donut around the city and keeping Phnom Penh inside its borders as a separate, fully-independent municipality.
The Phnom Penh municipality is situated where the waterways of the Tonlé Sap, Mekong, and Bassac rivers meet. For generations these channels have provided water to the city and continue to do so today.
Monsoonal flooding is a seasonable problem where the river sometimes overflows its banks. Cool season takes place in Cambodia during November and March (temperatures ranging from 22c to 28c); hot season, or summer, takes place between March and May (with temperatures ranging from 28c to 38c); and, finally, rainy season occurs between May and October (with temperatures ranging from 24 to 32c, with humidity up to 90%). The temperature in Phnom Penh can range from 15 to 38 degrees Celsius and the city experiences tropical monsoons intermittently.
Monsoons generally blow from the Southwest inland, bringing winds from the Gulf of Thailand and Indian Ocean between May to October. The dry season lasts from November through to March.
In short, the city of Phnom Penh experiences the most substantial rainfall between September to October, and its driest time is the two months of January through to February.
Population and Demographics
Phnom Penh City is a municipality area in itself covering approximately 678 square kilometers with a government status equal to that of any other Cambodian province. The municipality is subdivided into twelve administrative divisions called Khans, meaning districts - all of which fall under the governance of the Phnom Penh Municipality.
Of these twelve Khans or districts, Dangkao, Meanchey, Por Sen Chey, Sen Sok and Russei Keo are considered the outskirts of the city. These 12 Khans are then subdivided into 76 Sangkats, meaning communes, and, on last count, Phnom Penh had 637 Kroms, meaning villages within communes.
The Phnom Penh metropolitan area is home to around 2.5 million of Cambodia's total population of over 15.4 million. Khmer make up the majority of ethnic groups in Cambodia and in its capital city, comprising of approximately 90 percent of the total population. The next three largest minor ethnic groups are the Vietnamese, Chinese Cambodian (Khmer Chen) and the Cham (Muslim). Phnom Penh, along with Siem Reap and Sihanoukville, has remained significant global and domestic tourist destinations for Cambodia, drawing over 390,000 tourists to the country per year.
Meanwhile, the largest majority of Cambodia’s 80,000+ expat population reside in the capital city, making it the nation’s cosmopolitan hub, these expats involved primarily in corporate, NGO and teaching positions.
Aeon Mall, Cambodia’s first mega mall, sees many local shoppers herding to see the latest brands. The $200 million Japanese-built shopping center is only one of many new shopping complexes, hotels, township and condo projects springing up in Phnom Penh, as Cambodia rides a flood of high financial development rates in recent years. In addition, Phnom Penh will see the launch of The Parkson Mall in 2016, and Aeon Mall 2.
Various other new development projects are also including ground floor shopping plazas and malls in their designs, meaning the Phnom Penh market will see plenty of new options for shopaholics in the near future.
The city is also home to some of Cambodia's most iconic buildings and architecture. The oldest structure in the city is Wat Phnom, and this famous pagoda, constructed in 1373, has existed in Phnom Penh since its original founding. The main tourist attractions are the Royal Palace with the Silver Pagoda, and the National Museum, which holds a vast collection of Khmer antiquities. The Independence Monument, although built in the 1950s, is also constructed in the ancient Khmer style. Nowadays, most travellers also delve into the Khmer Rouge history, visiting sites such as S21 Prison/Toul Sleng and the Killing Fields.
Phnom Penh has by far the widest selection of cuisines available compared to any other city in Cambodia.
Outside of the capital, it is fair to say the world of cuisine revolves around fish and rice. A mix of tastes have been brought about by a history of influences upon the hub city, namely Khmer, Vietnamese, Chinese, Japanese, French, Thai and various other cuisines, meaning that Phnom Penh foodies are in for a treat!
Phnom Penh has a variety of nightlife, and something to suit all tastes. Bars and clubs are dotted all over the city, but given the compact size of Phnom Penh, it's never too far to crawl between different bars and clubs on a night out.
For those that are particularly lazy though, there are some core bar streets and nightlife areas where bars, clubs and late night eats are located together. The riverfront/riverside area along Sithoway Quay has hundreds of bars and restaurants, and great views of the river. The riverside is more catered to tourists, but expect to see all range of bars and upmarket lounges from Wat Phnom to the Royal Palace.
Up the side streets of the riverside, such as street 136, 110 and 104 expect to see bars of the hostess variety, but also some great live music joints and intimate neighborhood hangouts. Street 172 is also a popular lane for both tourists and expats to drink and eat.
Street 51 and Sorya Mall is another favorite nightspot of Phnom Penhers, especially those who plan to stay out to the wee hours. Centered on two of the most famous of Phnom Penh’s late night offerings, Heart of Darkness and Pontoon, street 51 never sleeps.
The Boeung Keng Kang 1 (BKK1) area is also home to some great drinking venues, especially in the Streets 278/51, Bassac Lane & Street 308 area, and these bars are dominated by expat patrons - with prices to match. The prices might be slightly higher than riverside and street 51, but the variety and quality of bars and restaurants in BKK1 are some of the best in Cambodia.
If you love live music, Phnom Penh is the Cambodian city for you, with an eclectic mix of the traditional and the imported hitting stages across the city every night of the week. The best place to find the latest gigs and information is the LengPleng music guide. Sign up to their fantastic weekly gig updates and you will never miss a beat of the Phnom Penh music scene.
Schools & Educational Institutes
For those with kids, Phnom Penh offers the best range of educational institutes of any Cambodian city, and the selection of schools is growing every year. Many of these “international” schools are accredited internationally, meaning it is easy for kids to move between schools inside and outside of Cambodia. But be wary that not all “international schools” are created equal, nor are international standards always reflected by this title.
Some of the most well-known primary and secondary schools in Phnom Penh include the International School of Phnom Penh (ISPP), Nira International School, the Canadian International School, Zaman International School, and Northbridge International School. In terms of Universities, Cambodia has plenty of great institutions, but the core subjects tend to be limited in scope to professional degrees in many cases. However, options for new subjects and core disciplines are rising every year. Some of the top universities include the Royal University of Phnom Penh, Build Bright University, the Royal University of Agriculture, the Institute of Technology of Cambodia, the Royal University of Law and Economics and Paññasastra University of Cambodia.
Siem Reap has a number of international standard hospitals and clinics offering tertiary care – including the main government-managed hospital Calmette which is equipped to handle most medical issues, or the Thai affiliated Royal Phnom Penh Hospital, under the well-regarded Bangkok Hospital group. Other options include the International SOS clinic offering English-speaking primary care and evacuation services, Krema Clinic and Naga Clinic who provides a broad range of medical care with multilingual doctors.
There is a decent range of general dentistry clinics also available offering full dental services including the five-star Roomchang Dental & Aesthetic Hospital and the International Dental Clinic.
Key Transport Services
Flights: Phnom Penh International Airport is the main airport in the kingdom, located approximately 7 kilometers west of central city. Cambodia has a few local airline companies. Cambodia Angkor Air is the national flag carrier, with its headquarters in Phnom Penh with an additional hub at the Angkor International Airport in Siem Reap province. Air Asia offers low-cost daily flights between Bangkok and Kuala Lumpur to/ from Phnom Penh. Jetstar Asia Airways also offers budget daily flights to/from Singapore. Qatar Airways flies to and from Phnom Penh, via Ho Chi Minh to a variety of destinations in Europe with a stopover in Qatar. New direct flight routes around the region and the world are being announced every month. Roads: Taxis, minivans and buses are available to reach most destinations throughout the kingdom and beyond to Thailand and Vietnam. Phnom Penh also has a rail service. Motor-taxis (moto-dops) and tuk tuks are readily available. Phnom Penh also has a bus rapid transit network and three bus lines now operate in the capital. Boats: River ferries between Phnom Penh and Siem Reap are offered daily, departing at 7am daily from the Phnom Penh Port on Sisowath Quay, with the trip taking between 4-6 hours.
Types of Property
CONDOS & APARTMENTS FOR SALE + FOR RENT:
The latest breed of luxury sky rise condominiums are tailored to the demand of international investors, who are able to buy condos, apartments and offices in Cambodia - as long as they are in a co-owned building and above the first floor. Increasingly too, budget options are available - and these are proving highly popular with local investors as live-in properties and rental earners.
SERVICED APARTMENTS FOR RENT:
Catering to the high-end expat market primarily, Phnom Penh has all kinds of serviced apartments available. These properties are fully furnished, and come with a range of services designed to make life easier and more pleasant - for long or short term stays.
FLAT HOUSES FOR SALE + FOR RENT:
Highly popular with locals, flat houses are the most popular kind of home in central Phnom Penh. They are affordable, able to be used for multiple purposes, and usually include the land ownership in the title.
VILLAS FOR SALE + FOR RENT:
Phnom Penh also offers opulent French inspired villas located throughout the city's hotspots, and many new Borey developments cater to this highly popular market for Khmer buyers with hundreds of newly built villas coming online every week.
Borey homes are essentially homes within a township development, a type of gated community. They can be villas, flat houses or link houses. All infrastructure is supplied by the developer, and each buyer can buy a property within the borey with individual hard title over that land plot. Normally, boreys also offer community facilities for all buyers to use. Boreys are seeing huge demand from local buyers in Phnom Penh.
New developments are bringing increasing options for serviced and non-serviced office space throughout Phnom Penh. There are still good opportunities for real estate developments in middle-end office market. The Cambodian market will continue to remain significant for investment consideration among the countries in this region in 2016.
There are lots of commercial opportunities in the capital to invest in established businesses such as bars, restaurants and guesthouses, as well as land for commercial development, petrol stations, and school premises.
New Developments and off plan homes in Phnom Penh are plentiful, allowing countless opportunities for local and international investors.
Although the price of land in Phnom Penh has increased continuously until present, it has yet to have any detrimental effects on the flow of trade within the city. Quite the opposite; rising land prices have instilled confidence in the economy and encouraged foreign investors to come to Cambodia and invest their resources in the country, expanding trade and stimulating ongoing economic growth.
While land prices are not on par with the region, this is not necessarily a bad thing, say experts. Chrek Soknim, CEO of Century 21 VTrust, said that in 2015 land prices had hardly climbed since the year prior, however, land prices in 2015 seem slightly higher when compared with 2013. He notes that, however, land prices in Phnom Penh vary depending on the region, with some suburbs seeing land prices increase up to 20 percent, whereas aggregate increases only reflect a 10 to 15 percent rise city-wide.
Soknim added, “The rise in land prices currently does not affect the flow of investment because the price of land in our country is a lot less expensive in comparison to neighboring countries.”
He continued, “The increases in the price of land of 10 to 20 percent are in line with the country’s economic growth, so it does not cause difficulty for new investors at the moment. But if it continues to rise in the next four to five years, that will hurt people who intend to invest in Cambodia.”
Sorn Seap, spokesperson for the Cambodian Valuers and Estate Agents Association, raised a similar view to Sok Ny. Seap suggests that land prices are currently rising in line with economic growth because land prices generally rise or fall depending on the state of a nation’s economy.
It is clear that land in Phnom Penh has the highest value; Siem Reap and Sihanoukville follow respectively. He added that the current land price does not affect the flow of direct foreign investment into the Kingdom since there are still a huge number of investors coming into Cambodia seeking various opportunities – mostly from Japan, Korea, China, Singapore, Malaysia, Taiwan, China, Hong Kong and other regional counterparts.
“Phnom Penh land price increases on average five to 15 percent per year. If it continues to rise, it will disturb the investment flows in the coming years because the market size of Cambodia, compared with the regional economy, is still small. Therefore, if the price of land were to become equal with regional prices, investors would naturally go to other countries where market opportunities are more profitable,” added Seap.
He continued, “I think we will be unlikely to see the impact of this phenomenon in the next five years, as the Cambodian economy is still not that robust. Investors both inside and outside the country only come in with a specific purpose and conduct detailed research before they start investing.” Sorn Seap concludes, “It’s a real market now though, not an inflated one – because an inflated market would jam when there was a problem, and a real one wouldn’t.”
For instance, when the land price fell generally during the global financial recession in 2008, land prices along Mao Tse Tung Boulevard did not go down. In fact, in contrast, prices in this area continued to rise slowly. This is because transactions were still occurring along this street, marking it as a real and robust marketplace.
“The increased price of real estate and land today is a good sign that we, as a national economy, are on the right track, and we won’t have a problem in the near future,” Seap confirmed.
According to a study by World Trust Estate on the price of land in 12 Khans of Phnom Penh in the first quarter of 2015, Phnom Penh land prices have gone up between 10 and 30 percent depending on the area.
The areas are defined by whether they contain commercial activities, residential property or industrial undertakings. Particularly, the commercial area along the main road in Khan Chamkarmorn this year has increased between $3,500 to $8,000 per square meter, compared to only $3,500 to $5,500 the previous year.
Land in trade zones located along smaller roads has increased from $2,500 to $3,000/m2 last year, up to $2800 to $4,000/m2 this year. The same study found that the price of commercial land along streets in Khan Tuol Kork has increased from $3,000 to $5,000/m2 in 2014, to between $3,500 to $8,000/m2 this year. Commercial land along smaller roads have also increased to current prices of around $2,500 to $3,000/m2, compared to $1,800 to $4,000/m2 last year.
Residential land has risen from $2,800 to $3,500 the year prior, to about $3,000 to $ 5,000/m2 currently.
Sung Bonna, CEO of Bonna Realty Group, said in a phone interview recently that land prices in Phnom Penh are divided into three zones: Zone 1 is the city center, where land prices seem a little higher. Land price in the suburbs, Zone 2, are still moderate in terms of the size and strength of the economy, as well as incoming investment trends, but the price in these areas is lower compared to other countries’ examples.
He said the average price of land in the city center costs $3,000 to $5,000/m2, which is good, but lower than prices recorded in other countries. He notes that these prices reflect that it is harder to gain revenue and profit from an investment in land here in Cambodia.
“Land prices in the neighboring countries are higher than ours, but they have bigger population densities, larger economies, and more investment. If we continue to think our land price is low and keep demanding an equal price, both domestic and foreign investors will lose their ability to invest in Cambodia,” said Bonna.
He added that prices of land in industrial zones, Zone 3, are ranging from $20 to $50/m2 which reflects the current lack of infrastructure in these areas.
SPECIAL ECONOMIC ZONES (SEZs):
Phnom Penh has various special economic zones (SEZs). SEZs in Cambodia are well suited to industrial ventures, and create attractive conditions for business to open in Cambodia. Phnom Penh’s largest and most-established SEZ is the Phnom Penh Special Economic Zone (PPSEZ) which recently announced plans to join the national stock exchange.
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The Phnom Penh municipality is overseen by the Governor and every district also has its own head Chief. Investment projects with capital less than USD 2,000,000 will be assessed by the Royal Government and then given to the Phnom Penh Investment Sub-Commission who will then decide if it qualifies as an investment project.
The Sub-Commission has its Secretariat office is located in the capital: see Phnom Penh Capital Hall at Planning and Investment Division (Investment Office) for more information. The General Department of Taxation can provide up to date info on tax regulation in Cambodia. The official website is well designed for info-seeking foreigners. Business registration is now available online in Cambodia; check out the Ministry of Commerce website for more details if you are planning to start a business in Phnom Penh.
Fire: Toul Sleng Fire Department, Phnom Penh: 023 723 555 / 012 786 693
Call from Stationary Telephone (Firefighter): 666 / 118
Police: Call from Stationary Telephone (Police): 117
S.O.S Police: 012 999 999
Traffic Police: 012 896 628
Tourist Police: 097 778 0002
Ambulance (S.A.M.U): 119
Call from Stationary Telephone (Hospital): 023 723 840
Calmette Ambulance: 023 426 948 / 023 724 891 / 012 912 947 / 016 585 108 / 092 858 434
Russian Hospital Ambulance: 023 217764
Kossamak Hospital Ambulance: 016 909774
Blood Transfusion Center: 023 215 949
Royal Phnom Penh Hospital: 023 991 000 - full ambulance and medevac services are available.
Services: Water Supply: 023 724 046
Electricity (EDC): 023 723 871
Phnom Penh Municipality Info:
Phnom Penh Capital Hall Address: # 69, Preah Monivong Blvd., Sangkat Srah Chak, Khan Daun Penh, Phnom Penh; http://phnompenh.gov.kh/en/
Administration Division, Phnom Penh Capital Hall (General Information): Tel: (+855) 23 722 054, Fax: (+855) 23 725 626, Email: firstname.lastname@example.org
Public Relations and International Cooperation Office (For Foreigners): Tel: (+855) 23 430 681, Fax: (+855) 23 430 681, Email address: email@example.com
If you want to learn more about investing in Cambodia, Foreign Ownership in Cambodia and the whole Cambodian Expat Experience, check out our other guides now!