Economic Update

Amid policy support and ongoing economic recovery, Phnom Penh’s real estate market is showing cautious momentum in the first quarter of 2025. According to the Asian Development Bank (ADB), GDP is projected to grow by 6.3 percent by the end of the year, driven primarily by industrial expansion. However, the inflation rate reached 6 percent in January, which exceeded the deposit rate and led to reduced household savings and purchasing power.

Government Policy

The government responded by enacting incentives such as delayed capital gains tax, a 0.1% tax exemption for properties under USD 25,000, and stamp duty exemptions for first-time buyers (on properties up to USD 210,000).

Sector Overview

Tourism

By February, foreign arrivals had increased by 28% year over year, indicating a recovery in the tourism industry. The number of hotels rose to 14,633 keys, and the affordable and mid-range daily rates in the Boeng Keng Kang district increased by 30%.

Office Space

Over 1 million square meters of office space are on the market, and 300,000 square meters—mostly Grade A—are coming in. Rent requests decreased, but as tenants grow pickier, higher-quality space is becoming more popular.

Retail

Despite economic pressure, retail stays flat, with a supply of more than one million square meters. The goal of renovations like Noro Mall’s rebranding to “Noro Lane” is to draw in both tenants and customers.

Condominium

2,830 condominium units were added to the residential supply, and over 4,000 more are anticipated this year. Due to weak demand and oversupply, prices in the mid-range and affordable segments are dropping. However, developer confidence was demonstrated by the launch of eight new projects.

Land

In areas connected to important infrastructure projects like the Techo Airport and Cam-Rok Bridge, land prices are steady with room to grow.