There are 25 provinces in Cambodia and the Kingdom has among the fastest rates of urban spatial expansion in Southeast Asia according to reports from the World Bank. The country remains an increasingly safe investment environment without the levels of risk of other frontier markets - this investor-friendly environment extends to owning a business as much as it does to owning certain types of property.
Cambodia’s construction sector’s biggest investors have been China, South Korea and Japan but this might be changing post-pandemic as the country looks to new markets and diversify its FDI (Foreign Direct Investment) and trading partners.
By Q1 2023, Cambodia’s total FDI was US$45+ billion and investors locked into the expected GDP growth rate being among the highest in ASEAN post-pandemic.
In several provinces in particular, construction and tourism are seen as key drivers, and some reports suggest the demand for industrial property in 2023 is rising compared to 2022 in Cambodia.
Increased Tourism & Investment Helps Boost Cambodian Real Estate
The recovery in the tourism industry post-pandemic as well as diversified investors are positive signs that add to the appeal of investing in property in Cambodia.
- According to the realestate.com.kh 2023 Consumer Sentiment Survey; Land, then Condominiums and Apartments were the most popular among buyers.
- Recent reports from the Ministry of Tourism suggested that in the first half of 2023, Cambodia experienced a remarkable surge in international tourism, with 2.57 million visitors arriving in the country.
Demand for commercial activities and accommodations will need to cater to these visitors, and for those with financial means and a long-term investment goal, this offers a chance to enter the market during a period of property availability.
The government hopes to attract seven million international tourists by 2026 and spread the attraction across the country with improved and diverse attractions and a better-trained service sector.
You can also find out more about retiring in Cambodia.
Domestic tourists regularly still visit Battambang but most international visitors will likely add on a visit to the region after travelling to Siem Reap which is still the biggest tourism drawcard in Cambodia and understandably so.
Battambang has, according to the Ministry of Information (MoI), attracted approximately 2.3 million local tourists and over 250,00 international tourists over the past five years, even with much of the period impacted by the pandemic. In terms of catering to visitors, there are 46 hotels and 97 guest houses (3,000+ rooms) in Battambang.
It might surprise some, but Battambang is still among the three largest cities in Cambodia. The charming city has for a long time had its own attractions and a thriving arts scene and has seen new festivals and education programmes tap into the creative side of this part of the Kingdom. Phare Ponleu Selpak (meaning "Brightness of the Arts") is one of the most well-known NGOs in the performing arts scene in the country and there are long-standing local and international eateries located in the city too.
Battambang has also been an alternative for retiring expats and those looking for a slower pace of life (in the same way that coastal destinations such as Kep and Kampot have attracted regular long-term expats over the years). The relaxed pace of life and its natural green surroundings are attractive to those not seeking a busy city life.
Among the more recent developments in Battambang include the on-again off-again process to either revive the abandoned Veal Bek Chan Airport airport or develop a new one in the city. In mid-2022, Battambang provincial governor Sok Lou also asked France to help repair and renovate some of the run-down French colonial-era properties which are a hallmark of the city.
In Q1 2023, it was also confirmed that Battambang city had borrowed USD $50 million from the Asian Development Bank for the development of the banks of the Sangker River and constructing an underground drainage system. The Battambang Provincial Administration has also been constructing the Independence Monument, the Independence Monument Park and the night market to attract more tourists.
The province is located to the northwest of the Kingdom and is located along the Thailand border. GIZ and the Banteay Meanchey provincial administration launched a website to promote investment in the province and utilised geospatial information technology to provide the data.
The idea was to deploy the data-driven resource to increase the competitiveness of the Banteay Meanchey in attracting investment projects and showcase the province’s untapped potential.
There are three Special Economic Zones in the province and Banteay Meanchey saw a 60% increase in capital investment in 2022 compared to 2020.
The provincial economy is rapidly growing and diversifying and provincial administration offers a business-friendly environment to expand, trade, and invest. The main potential sectors are agro-processing, manufacturing, and tourism and there is access to a young, productive, and cost-effective workforce - the large youthful population is 37.4% aged between 15 to 35.
Currently, the province has some good transport links - with 655 km of road network and three international border points with Thailand (the province is only 290 km from Bangkok and 359 km from Phnom Penh).
Kampong Speu is gearing up for a business boom according to some recent reports but it's one of many provinces seeing a push for investment. In Q1 2023, 5 manufacturing factories were announced in the province set up to employ more than 5,000 workers.
The provincial administration has revealed plans to set up 25 new factories and enterprises which is expected to generate more than 20,000 jobs in total - this follows a visit from Kampong Speu governor Vei Samnang to China’s Guangzhou province.
Samnang said in Q1 2023 that there are more than 380 medium- and large-scale factories already operating employing over 15,000 workers.
A luxury handbag and leather goods manufacturer confirmed their commitment by opening two branches in Kampong Speu, while six garment manufacturers are also looking to set up in the Cambodian province. Dozens of other factories specialising in products ranging from footwear to electronics could also be enticed to set up a presence in Kampong Speu.
More work and more employed workers, and hopefully continued investment in infrastructure in the province bode well for future property developments and potential rising land prices, more amenities and transport links. The province is also rich in national parks, waterfalls and natural scenery so could be opened up for ecotourism.
Where Are The Current And New Airports Being Developed In Cambodia
The Cambodian government previously announced an investment of USD $3.5 billion to build, expand or renovate Cambodian airports under the aviation development programme from 2015 to 2023 (Open Sky policy) but private-public airport developments have grabbed most of the headlines.
The plan is part of the vision to accelerate domestic transportation and link Cambodia to the international trade hubs and airports under this programme including Koh Kong, Poipet City, and the Mondulkiri airport.
The Siem Reap Angkor International Airport (SIA) is scheduled to open in mid-October 2023 and although dwarfing the current airport in the city, very few new airlines or routes have been announced in anticipation of the opening but are expected to do so in the coming months and years.
Techo Takhmao International Airport, the new Phnom Penh International Airport, will only likely be operational by 2024 at the earliest and the ambitious plans will see it be the 9th largest airport in the world when completed with all phases of construction.
These are just one part of several infrastructure developments in Cambodia that are underway or being planned for better national and international connectivity, transport, logistics and overall economic development.