Cambodia’s Rental Market Trends: Then and Now
Updated on: June 6, 2022, 5:03 p.m.
Published on: July 15, 2018, 10:25 p.m.

Cambodia’s Rental Market Trends: Then and Now

How would you describe last year’s real estate rental market in Cambodia? What was the defining theme?

Sorn Seap


Key Real Estate

In the course of 2017, the growth of the rental market in the Kingdom was higher compared to 2016 in terms of properties like warehouses, factories, shophouses, etc. This was particularly evident in Sen Sok District where development was going on in 2016 and reached its peak the following year.

Sen Sok’s neighboring district, Toul Kork, also saw the growth of its property market due to the presence and availability of many mixed-use developments, residential/commercial properties, and its location in-between highly-developed and newly-developed areas.

As for rental price, the rates in Sen Sok and Tuol Kork both increased. The rental rates in Sen Sok are still higher due to the transformation of many vacant residential lands into commercial or business areas. In places like Phsar Boeung Chhouk and Phsar Boeung Baitong, and in areas

along Mong Rithy Road and Phnom Penh Thmey District where businesses are located, prices jumped to between USD $600 and USD $1,300 per month.

Crispian Knowles

Manager, Seaps Cambodia

The demand for rental service last year was mostly from expats/foreigners (both short term and long term). Stocks and customers were plentiful, but it was mostly a renter’s market. There was an oversupply of condominium units which drove the prices of similar properties down.

Ross Wheble

Country Head,  Knight Frank (Cambodia) Pte Ltd

When analysing our Phnom Penh rental indices for 2017, there was a noticeable reversal in the performance of residential rents as compared with rents for commercial properties. Within the residential sector, we started to see the market shifting from a landlords’ market to a tenants’ market, with rents declining moderately towards the second half of 2017. Conversely, with the completion of Exchange Square and a number of other office buildings, commercial rents continued to record year-on- year growth.

Grant Fitzgerald

Country Manager, Independent Property Services (IPS)

The 2017 rental market in Cambodia continued to be very strong across both residential and commercial real estate and I would say the defining feature in the market was an increase in competition across all sectors. In the residential sector, the year consistently saw new apartment complexes and condominiums come online. We have noticed that a lot of these buildings have been priced much “smarter” than in the past, as owners are now much more aware of the plethora of choices potential tenants now have and have adjusted pricing and services accordingly.

The result of this increase in competition has been a general softening of prices and a lot more flexibility in lease terms and conditions. Renovated and stand-alone apartments have seen the biggest price correction as their price bracket of between $500- $900/month now gives tenants the option of a unit in a brand new apartment building with a pool and gym.

Occupancy rates in the commercial sector are still very strong with most ‘well run’ buildings sitting between 80-90 percent full. Again, similar to the residential sector, we have observed much more flexibility in pricing and lease terms and conditions. The increase in competition has pushed owners to review their pricing and it has become apparent that they are now seeing the advantages of reducing rates in order to fill their buildings up fast. An empty building makes no money and those that haven’t adjusted to market conditions will struggle moving forward.

How will the strengths and weaknesses of Cambodia’s real estate market rental market play out in the course of 2018?

Grant Fitzgerald

Country Manager, Independent Property Services (IPS)

One of the Cambodian real estate market’s biggest strengths in recent years has been its ability to attract foreign investors. From large developers to buyers of single condominium units, foreign investors have played a large part in the fast paced development of the industry, especially in the last 5 years. A national election in any country makes market conditions interesting, even more so in Cambodia. From previous elections, both local and foreign buyers and sellers have taken “wait and see” approach, a period which can last for 6 months following the election.

Surprisingly, the market has been quite robust in 2018 to date. Everyone has been expecting a significant slowdown, but the market has been continually active as we have had a steady stream of foreign investors come through the doors. This will inevitably slow down as we get close to the election, however, the 2018 real estate has held up much better than expected so far.

2018 will also see the much talked about ‘supply factor’ hit the market. The over-supply of condominiums and apartment buildings has been a much talked about weakness in the market over the past 2 years. We have already seen a significant slowdown in condominium sales in 2017 and this trend will continue throughout 2018. Hardest hit will be the higher end developments with limited or no avenues to foreign markets as they have to rely on local buyers who are wary of the over-supply and have lost their appetite for the time being.

Sorn Seap

Founder/Director, Key Real Estate

Just like in the previous years, rental transactions this year are dependent on how strong and stable is the economic growth in a given area and in the country as a whole.

Rental prices in well developed areas like BKK 1 increase slower compared to those in up-and-coming areas. This is true for most rental properties, except some commercial properties. Meanwhile, it is hard to increase the rental price for serviced apartments even if the demand increases because of oversupply of condos and similar properties in the market. The same can be said of office space, whose rental prices appear to be stagnant.

But in the up-and-coming areas in the suburbs of Phnom Penh, there is a big possibility of substantial increase of rent for both commercial and residential properties. However, just like in the past, it is still dependent on factors such as economic activities, investors’ interest, and influx of people. Political stability is also important as it is crucial to economic growth and stability and flow of investment.

With regards to the best location for rental properties in Phnom Penh, Sen Sok is still on top because of the presence of many new development projects like boreys, factories, condos, malls, etc. in the area drives the prices up. For example, a shophouse in the area can be rented out between USD $1,000 and USD $2,000 per month, which is way above the rate in other areas. Demand is also high because of the area’s big population.  

Chroy Changvar is also a good place to have rental properties, but its full potential has yet to be realised with many big projects still under-construction.

Southern Phnom Penh is also catching up to the rest of the city with major projects like a new airport, residential development, and infrastructure. For now, however, most property transactions are limited to buying and selling of land.

Crispian Knowles

Manager, Seaps Cambodia

The market has come under pressure in 2018 when some of the significant condominium projects were completed; and these condo units add competition to the existing serviced apartment stock as buy-to-let investors seek to rent their units. This may put downward pressure on rents.

Ross Wheble

Country Head, Knight Frank (Cambodia) Pte Ltd

With a significant number of condominium units due for completion this year, we believe that the trends identified in 2017 will continue into 2018. Over the medium term, this will have beneficial ‘knock-on’ effects for the overall economy, helping to reduce the cost of living in Cambodia and making it more competitive compared with neighbouring countries and cities.

Office rents are expected to remain relatively flat during 2018 whilst everyone is eagerly awaiting the opening of Aeon Mall 2 later this year, and it will be interesting to see the level of pre-committed space and what impact this may have on retail rents in Phnom Penh.

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