Author: Sreekanth Ravindran / Khmer Times
A potential misalignment exists between market realities and pricing strategies in the country’s real estate sector, a report presented last week has alerted.
‘Fearless Forecast’ Report by CBRE Cambodia highlight this trend as one among the major challenges faced by Cambodia’s real estate sector in 2025.
“The retail sector faces similar headwinds, with occupancy rates at 61.8 percent, substantially lower than the global standard of 90-95 percent for healthy retail markets. Despite these occupancy challenges, prime retail spaces continue to command rates of $22.6 per square metre,” the report pointed out.
Meanwhile, as per the report, the office occupancy rates stand at 65.1 percent well below the global benchmark of 85-90 percent while maintaining premium rents at $27 per square metre.
However, the report noted that the condominium sector maintains competitive pricing when considered on a regional basis. “Luxury condominiums in Bangkok average $6,500 per square metre while mid-range units in Phnom Penh typically command $2,200 per square metre.”
It called for a careful monitoring of the condominium sector with an upcoming supply of 3,200-plus units. “The serviced apartment segment’s addition of 240-plus units appears measured with Grade A rents at $19.3 per square metre.
“This sector shows particular promise as market research indicates that successful serviced apartments typically achieve occupancy rates between 88 percent and 92 percent in prime Asian locations, suggesting room for growth in Cambodia’s market.”
The report highlighted the indicators, which suggested that the country’s real estate sector is navigating a crucial phase of market maturation. “With office and retail occupancy rates significantly below international benchmarks – where healthy markets typically see vacancy rates of only 10-15 percent for office and 5-10 percent for retail space – stakeholders may need to implement strategic adjustments to improve market fundamentals.”
Kim Kinkesa, CBRE Cambodia Managing Director, told Khmer Times two weeks ago that the real estate and condominium market in 2025 closely mirrors the situation in 2024, with a limited number of new projects being introduced.
“Many of the projects still on the market continue to attract customers, primarily those developed by experienced and reputable companies in this sector.
“For new development projects, 2025 presents significant challenges, particularly for first-time developers entering the market, Kinkesa said, adding that, building trust and establishing a strong presence in such a competitive environment requires both experience and a proven track record.
“Projects that are currently performing well and maintaining strong sales tend to be located in city centres, where demand remains high. Additionally, developments spearheaded by seasoned developers with a solid reputation are more likely to succeed,” she said.
Source: khmertimeskh.com, Published on January 30, 2025
