Commercial Real Estate - Cambodia

The Commercial Real Estate market market in Cambodia is expected to reach a value of US$45.25bn by 2024.
It is projected to show an annual growth rate (CAGR 2024-2029) of 0.73%, leading to a market volume of US$46.91bn by 2029.
When compared globally, the United States is anticipated to generate the highest Real Estate value, amounting to US$25.3tn in 2024.
The commercial real estate market in Cambodia is experiencing a surge in demand due to the country's rapid economic growth and increasing foreign investment.

Definition:

Commercial real estate can be defined as properties that are used for business purposes, such as office buildings, retail spaces, warehouses, and industrial properties.

Additional information:

The commercial real estate market contains the value of commercial properties as a key performance indicator. This is the worth of all office buildings, retail spaces warehouses, and industrial properties for the timeline of our data coverage.

Office buildings
Retail spaces
Warehouses
Industrial properties

Residential real estate
Publicly owned buildings used by the local government
Buildings used for public health care services

The Commercial Real Estate market in Cambodia has been experiencing significant growth and development in recent years.

Customer preferences: Customers in Cambodia are increasingly looking for modern and well-equipped commercial spaces that can cater to their business needs. They prefer properties that offer a range of amenities and facilities, such as parking spaces, security systems, and easy access to transportation. Additionally, there is a growing demand for flexible and shared office spaces, as more businesses are adopting remote work and flexible working arrangements.

Trends in the market: One of the key trends in the Commercial Real Estate market in Cambodia is the increasing construction of commercial buildings, particularly in the capital city of Phnom Penh. This is driven by the growing demand for office spaces from both domestic and international businesses. The construction of new commercial buildings is also fueled by the government's efforts to attract foreign investment and promote economic growth. Another trend in the market is the rise of mixed-use developments, which combine commercial, residential, and retail spaces in a single project. These developments are becoming popular as they offer convenience and a variety of amenities in one location. They also cater to the changing preferences of customers who are looking for integrated and vibrant spaces.

Local special circumstances: Cambodia's strategic location in Southeast Asia and its growing economy make it an attractive destination for foreign investors. The government has implemented various policies and initiatives to attract foreign investment, including tax incentives and streamlined processes for obtaining business licenses. This has led to an increase in foreign businesses entering the market and driving demand for commercial real estate. Additionally, Cambodia's young and growing population is contributing to the demand for commercial spaces. The country has a large pool of young professionals who are entering the workforce and starting their own businesses. This demographic trend is fueling the demand for office spaces and other commercial properties.

Underlying macroeconomic factors: The Commercial Real Estate market in Cambodia is benefiting from the country's strong economic growth and stability. Cambodia has experienced robust economic expansion in recent years, driven by sectors such as manufacturing, construction, and tourism. This has created a favorable business environment and increased the demand for commercial spaces. Furthermore, the government's focus on infrastructure development, including the construction of new roads and transportation networks, is improving connectivity and accessibility. This is attracting more businesses to Cambodia and driving the demand for commercial real estate. In conclusion, the Commercial Real Estate market in Cambodia is witnessing significant growth and development due to customer preferences for modern and well-equipped spaces, the construction of new commercial buildings, the rise of mixed-use developments, the government's efforts to attract foreign investment, Cambodia's young and growing population, and the country's strong economic growth and stability.

Data coverage:

Figures are based on value of commercial real estate.

Modeling approach / Market size:

Market sizes are determined by a bottom-up approach. As a basis for evaluating this market, we use national statistical offices. Next, we use relevant key market indicators and data from country-specific associations such as share of industry, manufacturing, and services of the GPD, price level index, GDP. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the market, for example, exponential trend smoothing.

Additional Notes:

The market is updated twice per year in case market dynamics change. The impacts of the Russia-Ukraine war are considered at a country-specific level.

This report presents a comprehensive analysis and additional information on the Financial market, in a PDF format.

After a challenging period during the coronavirus pandemic, the European commercial real estate sector now faces additional pressures, including inflation, record-high interest rates, and sluggish economic growth. In 2022, these challenges were evident through contracting investment volumes in the two largest markets—the United Kingdom and Germany. Although the shifting economic landscape has impacted all commercial real estate subsectors, industrial and logistics—a property type that demonstrated incredible resilience during the pandemic—continues to be the most popular investment class. The performance of the sector is closely tied to the state of the economy, explaining why cities with flourishing capital markets garner the most interest from investors. In 2023, investors identified London, Paris, and Madrid as the three most attractive markets.

Growing demand for industrial and logistic real estate is prominent in Europe, driven by the increase in online retail sales rather than in-store. All the Nordic countries saw steady growth in their e-commerce sales during the past fifteen years and more, and the growth is expected to continue. Investments in the industrial and logistic real estate industry have generally been at a higher level during the last few years. The highest investment value among European countries in the first half of 2021 was in the United Kingdom, while Sweden topped the list among the Nordic countries, and was fifth in terms of industrial and logistics investment in real estate in Europe that year.