Factory demand soars in 2023, despite slower overall investment

Demand for industrial property in 2023 is rising compared to 2022, said Stephen Suen, long-time commercial and industrial property expert and co-owner-operator of Yi Fung Real Estate Services in Phnom Penh since 2015.

“To a certain extent the manufacturing sector has seen more demand since the start of 2023,” Suen said.

Suen went on to add that 2023 has seen manufacturing industries with higher profit margins entering the Cambodian industrial market, including car automotive parts, renewable energy and electronic manufacturers.

Furthermore, logistics company expansions across the region and locally led to a greater demand for warehouse space in major transit hubs across Cambodia, he explained.

“However, a continual financial war between major economies has meant less incentives for traditional manufacturing industries to reshuffle and re-expand manufacturing operations in other countries.”

Suen said, “Chinese manufacturing has been losing ground in benefiting South East Asian countries since 2022. But opening the door to others at more realistic rates since a substantial exodus in 2019 and 2020.”

Yet this poses more opportunity to Cambodians and other foreign investors, he noted.

“According to our data, industrial land demand started to increase towards the end of quarter 2 and in quarter 3, 2023. In these periods we have seen various land investors seeking to acquire larger plots between 10-60 hectares either for self-operating or on an investment perspective.”

“A very good indication our team sees nowadays is that buyers and renters came through our office for the first time already showing knowledge on local geographical aspects related to their investment,” said Suen, indicating foreign and local investors are becoming more aware of actual trading trends.

“2023 is the post-Covid era with many in the market having the anticipation of a market return to former heights, but the reality is a shortage of Chinese investors,” he said regards to the state of the real estate sector generally.

With roots in Melbourne, Australia, and downtown Hong Kong, Suen has traditionally supported investors from Hong Kong looking for real estate investments in Cambodia during the rising investor market of 2015-2019.

“Surprisingly we are seeing many investors from Hong Kong looking for opportunities in Phnom Penh this year, perhaps due to their own economy’s slow recovery and wilted domestic demand.”