Warehouses and factories play a crucial role in supporting businesses engaged in manufacturing, storage, and distribution activities in Cambodia. They are a core part of the commercial property portfolio in the Kingdom.
These facilities, and naturally the land they are built on, are strategically located on the outskirts of major urban hubs to ensure easy access to transportation networks and key logistics centres, and the sheer number of infrastructure projects in development and planned means there are opportunities here.
We review some of the locations of warehousing, factories, and special economic zones, as well as the essential information needed for lease terms, ownership, and prices in the Cambodian market.
Cambodia's Special Economic Zones (SEZs) - Why Invest?
Cambodia's Special Economic Zones (SEZs) offer incentivised opportunities for investors and businesses looking to establish in Cambodia. Warehouses and factories are essential for the core business type established in the SEZs which are manufacturing a variety of goods.
Special Economic Zones (SEZs) like the Sihanoukville SEZ and Phnom Penh SEZ offer well-developed infrastructure, tax incentives, and streamlined customs procedures, making them attractive for businesses, but they are just two of dozens of SEZs in the country.
These areas of economic drivers offer numerous advantages and are strategic zones typically equipped with well-developed infrastructure and utilities, which are attractive to both local and foreign businesses.
- SEZs are designed to attract foreign investments and industrial businesses, fostering a conducive environment for those looking to establish warehouses and factories in Cambodia.
- Prominent SEZs include Phnom Penh SEZ, Sihanoukville SEZ, Poipet SEZ, and Bavet SEZ, each offering unique advantages for businesses.
- Multinational companies such as Coca-Cola, Nike, Adidas, Yazaki, and Yeos have established themselves in different SEZs across the kingdom.
Some of the more popular Special Economic Zones in Cambodia include:
- Phnom Penh SEZ - provides businesses with convenient access to the city's infrastructure and logistics networks.
- Sihanoukville SEZ - the preferred choice for businesses engaged in international trade and logistics due to its proximity to the international seaport.
- Poipet SEZ - located at the border with Thailand, offers businesses a gateway to cross-border trade and access to Thailand's markets.
- Bavet SEZ - situated at the border with Vietnam, provides businesses with proximity to Vietnam's markets.
In more recent news about the developments of these economic hubs, Cambodian Prime Minister Hun Manet said at the start of 2023 that Cambodia is considering creating a special economic zone by countries. He also emphasised the importance of the Sihanoukville SEZ as the master plan for the city is being rolled out.
Warehouses and Factories - Commercial Opportunities In Cambodia
Warehouses and factories in Cambodia offer numerous advantages for businesses and these essential manufacturing and logistics facilities are mostly situated just outside major cities resulting in cost-effectiveness due to lower land prices and access to workers.
Their proximity to transportation routes and logistics centres ensures efficient supply chain management, leading to reduced transportation costs and delays. The expansion of the transport networks and the continued investment into infrastructure is also hoped to aid the expansion of the logistics and export trade.
Locations for Warehousing in Phnom Penh:
- Sen Sok District, located in the northern region of Phnom Penh
- Por Sen Chey District, situated southeast of Phnom Penh
- Dangkao District, located to the west of Phnom Penh
Pricing, Lease Terms & Ownership
Warehouses and factories in Cambodia provide businesses with flexible options to suit their operational needs.
Lease terms typically range from 5 to 10 years, accommodating long-term industrial activities, although shorter agreements can be arranged to meet specific requirements.
Ownership of landed properties such as land and warehouses in Cambodia is open to Cambodian nationals and naturalised Cambodians. For foreigners, ownership can be secured through alternative mechanisms such as nominee arrangements, land-holding companies, and the new Trust law. As of January 2024, there are 810 registered Trust cases which account for USD $1.29 billion worth of assets in Cambodia.
Prices for renting or purchasing these industrial facilities can vary widely and are influenced by factors like location, size, and available amenities. Rental rates usually range between USD $2 to £5 per square meter per month, while purchase prices can exhibit significant variability.
Both warehouses and factories commonly require security deposits equivalent to 2-3 months' rent, which are open to negotiation, and advance rent payments may also be requested to facilitate smooth leasing processes.
- Lease terms for warehouses and factories generally range from 5 to 10 years in Cambodia, with flexible options available.
- Ownership is open to Cambodian nationals and naturalised Cambodians, while foreigners can secure ownership through alternative mechanisms.
- Rental rates typically vary from USD $2 to $5 per square meter per month, while purchase prices exhibit significant variability.
- Security deposits, equivalent to 2-3 months' rent, are common, with negotiable terms and possible advance rent payments.
In Q4 2023, the Development of Cambodia (CDC) announced a master plan for the national transport and logistics sectors which entails more than 170 projects, with an estimated value of $50 billion. More recently, in January 2024, a cross-docking and cold storage facility was inaugurated at the Phnom Penh Autonomous Port.
Cambodia's commercial real estate still holds a significant place within the country's real estate sector. Specifically, there is notable demand for factory and warehouse real estate in proximity to Sihanoukville, Phnom Penh, Poipet and Bavet primarily due to their transportation and logistics connectivity.