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Market Insights Q1 2025

CBRE Cambodia

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Report Description

Sector: Real Estate, Architecture & Construction

Preamble

Unlock the key takeaways from Q1 with our in-depth Market Insights report. Whether you’re an experienced investor or just entering the market, understanding where the trends are heading can be your greatest asset. From commercial rebounds to residential demand surges, Q1 has set the tone for what’s next in 2025.


Summary

CBRE Cambodia’s Q1 2025 report highlights a cautiously optimistic outlook for the Kingdom’s real estate and infrastructure sectors, supported by macroeconomic recovery, infrastructure investment and increasing investor interest. However, challenges remain in specific segments such as office and retail, which are still navigating the post-pandemic transition and evolving tenant preferences.

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Highlights

Macroeconomic & Policy Environment

  • Cambodia’s economy showed modest growth in Q1 2025, driven by expanding exports, rising manufacturing output, and tourism recovery.

  • The government’s efforts to diversify the economy beyond garments, especially into electronics, automotive parts, and green energy, are gaining traction.

  • Major foreign direct investment (FDI) inflows from China and regional players continued, particularly in industrial zones and infrastructure projects.

  • External risks such as global tariff instability (e.g., US-China tensions and USAID funding freezes) may dampen momentum.


Tourism & Air Connectivity

  • Tourism rebounded significantly in Q1, with over 400,000 foreign visitors to Angkor Wat and strong domestic tourism during Khmer New Year. New air routes, including Phnom Penh-Hong Kong by Cambodia Airways, signal renewed international connectivity.

  • The much-anticipated Techo International Airport, slated for mid-2025 opening, is expected to catalyze further tourism and logistics growth.


Infrastructure Developments

  • Progress on key infrastructure projects is transforming connectivity.

  • Techo Flyover is now 100% complete.

  • Techo International Airport Phase 1 is 95% done.

  • Expressway and bridge projects are advancing in Kratie, Chak Angre–Prek Pra and Mondulkiri.

  • Ambitious urban projects like the Phnom Penh Metro Rail system and Funan Techo Canal are in planning or early stages.

  • These initiatives are expected to improve urban mobility, attract investment and raise land values in emerging corridors.


Industrial & Logistics

  • Industrial real estate remains a strong performer, buoyed by new SEZ developments such as the USD $500M zone in Preah Sihanouk and Sweden’s largest factory in Phnom Penh.

  • Investor demand is focused on sites near new infrastructure, with land prices rising in key logistics hubs.


Office Market

  • The office sector remains under pressure.

  • Average occupancy rates declined slightly quarter-on-quarter, and rental yields remain compressed.

  • Occupiers are showing preference for newer, well-located buildings offering flexibility and sustainability features.

  • The market is in a tenant-favourable phase, with incentives and lease renegotiations common.


Retail & Hospitality

  • Retail has been slow to recover, especially in older or poorly located malls. New formats such as mixed-use spaces and “walking street” style developments in Phnom Penh are gaining popularity.

  • Hospitality showed positive signs, driven by domestic demand and the return of group travel from China and Korea.

  • Renovated hotels and integrated resorts are repositioning for premium experiences.


Residential Sector

  • The condo market remains subdued with limited new launches. Developers are focusing on mid-range and affordable housing, while landed homes (especially gated communities) are in stronger demand.

  • Foreign interest is rebounding slowly, but legal and regulatory clarity remains a concern for buyers.


Outlook

CBRE expects continued growth in industrial and infrastructure-led segments in 2025. Office and retail may remain flat until 2026, unless demand dynamics shift. Key risks include external trade shocks, political uncertainty and interest rate volatility. Nevertheless, Cambodia’s young demographic, strategic location and infrastructure investments make it an increasingly attractive frontier market.

 

CBRE Market Insights Series

CBRE Cambodia’s Market Insights series provides quarterly analyses of the Kingdom’s real estate landscape, offering data-driven perspectives on key sectors including office, retail, residential, industrial, and infrastructure. Drawing from on-the-ground intelligence and regional trends, the reports highlight market movements, investment drivers, policy shifts, and development hotspots. Designed for investors, developers and industry stakeholders, the series helps contextualize economic shifts and forecast real estate trajectories in one of Southeast Asia’s most dynamic frontier markets.


About CBRE Cambodia

CBRE Cambodia, operating under Advantage Property Service Co., Ltd., was established in 2008 as the first international real estate services firm in the Kingdom and has since grown into Cambodia’s leading real estate advisory and brokerage firm. As an affiliate of CBRE Group, the world’s largest commercial real estate services firm, CBRE Cambodia offers comprehensive services across all major asset classes, residential, office, retail, industrial & logistics, hospitality and land, alongside investment advisory, valuation, research & consulting, and project/property management, leveraging both global standards and deep local insights. With a workforce of over 60 professionals in Phnom Penh, it supports both foreign and domestic investors, developers, occupiers, and landlords with robust data-driven analysis, proprietary market intelligence, and a wide network spanning Southeast Asia and beyond.




 
 
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