Cambodia is one of the major Southeast Asian countries for real estate investment. Over the years, the country has become quite popular in the commercial sector because of its foreign investments. So, you can make the best use of your money with real estate investment, especially across the commercial property.
The economic turndowns paved the way for a property shortage. However, commercial properties were quick to recover. Suppose you invest in a commercial property with IPS Cambodia. In that case, you will receive guidance throughout the process as our expert real estate agents have served Cambodia’s real estate market for more than 10+ years and have a distinctive network of sellers.
Benefits of Commercial Property Investment in Cambodia
When investing in commercial property, factors affecting the real estate market price must be considered. According to the World Bank report on Cambodia’s Economy, the rebound of tourism in Cambodia must have helped the growth by 4.8% by the end of 2022.
Some of the major benefits of investing in commercial properties in Cambodia include the following:
1. High ROI through Rental Yields
The return on investment for commercial properties is usually higher than rental yields. When you zone the commercial property appropriately, it will help you unlock the complete potential of the property. As a result, you will be able to generate higher income.
Moreover, it is quite easier to finance commercial properties than residential properties along with flexible terms. You will get the option of a longer loan term with a low-interest rate. Furthermore, any change in the housing market will not impact commercial property. This is because businesses will always need a space for operating.
2. Economic Growth and Stability
Cambodia is one of the most stable Southeast Asian countries. There are various economic fields open for individuals. Foreign companies are continuing to enter the Cambodian market. Apart from that, foreign countries are also providing funds for infrastructural developments.
The company is also setting up various economic zones. Having commercial properties and leasing them out to investors will provide many opportunities. As a result, the economic growth across this domain will stabilise your business.
3. Capital Appreciation
If your Cambodian commercial property is situated in the right place, the value will appreciate over time. As a commercial property owner, you can charge any rent for businesses’ space. As a result, if you have any mortgage payments, you can benefit from a steady income source.
When you sell commercial properties in the future, the return will be higher. This is mostly because the value appreciates with time. Moreover, commercial properties are in higher demand. When you sell your commercial property, you will likely get a higher seller price than a residential property.
4. Regular Flow of Income
You can put up the commercial property you own for rent. This will pave the way for receiving a regular flow of income. There are different ways through which you can earn. You can charge rent, sell products, or even lease your property to other businesses.
There are some risks associated with commercial property. However, the benefits are more than the risks. If you have proper management and planning, commercial property can help to generate a stable source of regular income. As a result, it will help in achieving your financial goals.
5. Increase in Demand
There is no time when commercial properties are not in demand. Various international companies in Cambodia have set up their offices here. Therefore, the demand for commercial spaces such as industrial warehouses, office buildings, and retail spaces is higher. Other factors like low labor costs and investment policies are attracting the attention of foreign investors for setting up the business.
The rise for commercial properties in Cambodia is comparatively higher. Some areas are also experiencing double-digit growth rates. As a result, commercial property investors can capitalize on the country’s strong economic growth.
6. Favourable Investment Climate
According to research by CBRE, the prices of CRE properties have risen significantly since 2021. Therefore, it is quite attractive to foreign and local investors. The government has introduced various measures to encourage foreign investments. The country has low labour costs, which makes it an attractive area for setting up operations.
The commercial property market of Cambodia has low entry barriers. As a result, it contributes to the developing infrastructure of the country. The demand for commercial properties is rising. Similarly, the price of properties is also rising. Investors who wish to diversify their portfolio can get a lot of opportunities in Cambodia. They can also take advantage of economic growth and the expanding market.
7. Strategic Location
The strategic location of Cambodia in Southeast Asia provides a strong foothold in the region. The country shares borders with Vietnam, Laos, and Thailand. The capital city, Phnom Penh, is an efficient space for transport routes for products and goods.
Cambodia is very close to China, one of the largest economies in the world. Furthermore, its strategic location of Cambodia also makes it an efficient participant in China’s Belt and Road Initiative. This initiative is to promote regional connectivity along with infrastructural development. Since Cambodia is a fast-growing market, investing in commercial properties brings more opportunities.
8. Few CRE Competitors
The Cambodian real estate market comprises commercial and residential, discussed above. Both residential and commercial markets are in great boom. However, Cambodia’s commercial real estate market is far better than the residential one. Still, there are very few investors in the commercial sector.
Most people consider the commercial market to be highly competitive and risky. As a result, they refrain from investing in this market. Since the number of investors in commercial real estate is low, it would be easier for you to begin your investment. Considering the low number of investors, there are many properties to invest in. You can research the commercial property market with the help of professionals like IPS Cambodia and start your investment immediately.
9. Tax Benefits
If you’re looking forward to saving money, consider investing in commercial real estate. These properties have to offer a lot of tax benefits. The renovation and maintenance costs of the Cambodian commercial market are quite high. However, since you get tax benefits, the expenses are lower and affordable.
The capital gains tax on Cambodia has been postponed. Initially, it was expected to be implemented in 2022 but it was postponed to 2024. Because of that, it will be easier for businesses to recover from the economic turndown. Moreover, the recovery would be pretty fast, bringing in many business investment opportunities.
Conclusion
The commercial real estate market is flourishing with each passing day. Investing in CRE in Cambodia will bring a lot of financial gains compared to the residential market. Investing in the commercial real estate market also ensures you get reliable clients, apart from the profits. Therefore, the commercial real estate market is for those who seek secure and reliable investment methods.
You can choose from different types of commercial real estate properties in Cambodia. Therefore, it is advisable to take the help of professionals before starting your investment. If you’re considering investing in Cambodia’s commercial real estate market, contact IPS Cambodia. With a wide range of properties available, you will surely find something that fits all your needs.
KH