Cambodia’s real estate landscape ascends with growth, opportunities, and challenges

The country keeps a robust real estate market amid economic expansion and global investment trends

Cambodia’s robust economic growth, averaging 7.1 percent annually from 2011 to 2020, has propelled the nation into a dynamic real estate market. Juwai.asia reported key factors driving this growth include successful poverty reduction, improved infrastructure, and heightened foreign investment. 

The country offers diverse investment opportunities, with condominiums in cities like Phnom Penh, Siem Reap, and Sihanoukville presenting a range from affordable units to luxurious penthouses. Land, however, remains the most sought-after investment, constituting 36.6 percent of total preferences in 2023, driven by its scarcity, versatility, and appreciation potential.

According to Cambodia Investment Review, the real estate market’s resilience is further emphasised by significant construction permits issued in 2023, totaling 1,463 projects with an area of 5,000,000m2 and an investment exceeding USD 22,270 million, marking a 138 percent increase from the same period in 2022. Notably, industry experts, including Oknha Mann Chandy, highlight the high returns of land investments, ranging from eight percent to 15 percent annually.

Related: Cambodian prospects amidst oversupply and global shifts

Foreign investors eyeing Cambodia encounter certain restrictions, as land ownership is limited to Khmer nationals. However, the 2010 law permits foreigners to own buildings with a “Strata Title,” primarily applicable to new apartment buildings. Additionally, recent reforms under the 2021 Investment Law aim to attract more foreign capital by introducing “smart incentives” and mandatory “after-care services.” These incentives encompass VAT exemptions, tax rebates, and sector-specific benefits, contributing to Cambodia’s appeal as an investment destination.

Prime Minister Hun Manet’s efforts to boost the real estate sector include allowing foreigners to use Cambodian representatives for property purchases. While land titles list a Cambodian owner, separate contracts protect foreign investors. This move, along with the easing of loan conditions by the government and the National Bank of Cambodia, aims to revitalise the real estate market amid challenges posed by the COVID-19 pandemic. 

However, Radio Free Asia noted the concerns persist regarding potential sovereignty issues, human rights abuses, and challenges related to corruption and ineffective state institutions. Despite these challenges, Cambodia’s comprehensive strategy positions itself as an increasingly attractive destination for global investors looking to engage in a variety of sectors, including high-tech industries and innovation.