Data|The recovery of the tourism industry in the first quarter led to an increase in occupancy rate, and Cambodia's real estate market is stable and improving

A few days ago, CBRE Cambodia released the real estate market report for the first quarter of 2023. The report shows that the economic recovery is obvious and the real estate market is slowly picking up.

Driven by a strong recovery in tourism 

Both supply and demand of the hotel service industry are increasing

In the first quarter of 2023, Cambodia's infrastructure construction is constantly improving, and airports, high-speed rail, expressways, bridges, and national roads are in full bloom, the upgrading of infrastructure has provided strong support for Cambodia's economic development and tourism recovery.

In the first quarter, Cambodia’s tourism industry recovered rapidly, and coastal cities, Siem Reap, Phnom Penh, and ecotourism were the most popular destinations for tourists. At the same time, the Cambodian government also launched the "Cambodia Tourism Year 2023" campaign, together with the 32nd Southeast Asian Games and the 12th ASEAN Para Games, it is expected to attract 4 million international tourists. CBRE also predicted that during the Southeast Asian Games, the number of Cambodian tourists could reach 2.5 million to 5 million.

Therefore, the hotel service industry in Cambodia has also ushered in a recovery. According to CBRE data, in the first quarter, Cambodia’s hotel supply and demand both increased, of which the supply increased by 11%, and the occupancy rate and housing prices also showed a slow recovery trend, Among them, the recovery rate of budget hotels is higher than high-end hotels.

In addition, in the first quarter of 2023, There are four newly completed four-star hotels, located in Chamkarmon District (Sun&Moon Riverside Hotel & Ibis Budget Phnom Penh Riverside), Toul Kork District (Fairfield by Marriott Phnom Penh), and Daun Penh District (Capri by Fraser).

The office market is stable and improving

Retail focus on Hun Sen Boulevard

According to CBRE data, the office occupancy rate in Cambodia gradually stabilized in the first quarter, and the gap between quotating price and deal price continued to widen. At the same time, it is estimated that there will be more than 203,000 sqm of new supply in 2023.

There are 3 newly completed commercial office buildings: Prince International Plaza in Sen Sok District, Chip Mong Tower in Toul Kork District, and Samaky Tower. At present, there are still many problems in Cambodia's commercial office products, such as old buildings that need renovation, and projects that have stopped working and selling.

In terms of the retail market, the average occupancy rate in the first quarter of 2023 is 70%, and the occupancy rate of shopping centers continues to lead, it is estimated that the new supply in 2023 will exceed 119,000 square meters.

In terms of rents, the rents of shopping centers remained stable from the previous quarter, and the rents of prime hight street increased by 8.9%. In addition, the rents of retail podiums and community mall showed a downward trend.

At present, two large shopping malls, Chip Mong 271 Mega Mall and ÆON Mall Mean Chey, have been gathered along Hun Sen Boulevard, and their popularity continues to grow. In addition, PH Diamond Place is under construction, so the south of Phnom Penh, especially along Hun Sen Boulevard, will gradually become a new retail area.

Apartment market supply continues to increase

Average price of link houses up 7%

In the apartment market, the supply continues to increase. In the first quarter, more than 1,300 apartments were newly entered the market, more than 3,900 apartments were completed, and more than 5,600 apartments are still under construction.

In the sales market of apartment products, the overall price remains stable, with a decrease of only 0.1%-0.4% from the fourth quarter of 2022.

At the same time, according to Compass Real Estate, the average price of new apartments in the main areas of Phnom Penh is $1661/㎡ in 2023, and the average price of BKK, Prampi Makara, Chamkarmon, Toul Kork, and Daun Penh districts lead the market, reaching $1800 /㎡.

In the apartment rental market, the average rental price of an apartment in Phnom Penh in the first quarter was about $10/㎡, and the price varies depending on the area, decoration, floor, supporting facilities and other conditions.

In terms of landed-residential, the first quarter of 2023 is considered to be the quarter with the least number of development projects in the past five years, with only 4 projects were newly launched on the market, and 7 were completed. More than 60 landed-residential projects are expected to be completed in 2023.

In terms of selling prices, the selling prices of landed-residential projects have been adjusted to a certain extent. According to CBRE data, in the first quarter, apart from the average selling price of link houses rising by 7%, the selling prices of shophouses and villa projects showed a downward trend.

According to the data from Compass Real Estate, the average price of Borey projects in the main areas of Phnom Penh in the first quarter of 2023 is $96,000 per unit, and there are more than 120 projects on sale. Among them, the average price of Borey projects in Sen Sok, Russey Keo, and Chbar Ampov District all exceeded $100,000 per unit.

On the whole, Cambodia’s economic development in the first quarter was generally positive, driven by the strong recovery of the tourism industry, The Asian Bank has predicted that Cambodia's economic growth will reach 5.5% this year, which can boost the recovery of the real estate market.

In the first quarter, the hotel service industry and retail industry performed better, while the apartment market and landed-residential are still recovering slowly.

At the same time, It’s should be mention that, the rise in interest rates in the international market has aroused concerns among developer enterprise and consumers. However, according to the President of the Cambodia Microfinance Association (CMA), the United States and Europe have substantially raised interest rates to cope with inflationary pressures, but members of the association have not raised interest rates on existing loans, meaning existing customers will continue to pay the same loan interest rates , until the end of the loan package.

Photo︱Caroline

Editor︱Sunnie, Editor-in-Chief︱Nicole

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