Foreign Direct Investment in Cambodia’s Real Estate Market

Cambodia’s real estate market is still in its early stages of development, presenting significant growth potential for the future. As the country continues to progress, the demand for property is expected to rise, opening up opportunities for foreign investors to capitalise on the expanding Cambodian real estate market.

According to the Council for the Development of Cambodia ( CDC ), foreign direct investment (FDI) in real estate in Cambodia increased by 53% in 2021 – from US$1.5 billion in 2020 to US$3.4 billion. This marked the highest level of FDI in real estate since 2013. The CDC projects that FDI in real estate in Cambodia will continue to grow to $4.6 billion in 2023.

The surge in foreign investment in Cambodian real estate can be attributed to several key factors:

• Strong economic growth
  The Cambodian economy grew by 7.5% in 2021, positioning it as one of the fastest-growing economies globally. This robust growth has created new opportunities for businesses and investors, particularly in the real estate sector.
• Affordability
  Compared to other Southeast Asian countries, Cambodia offers relatively affordable property prices. This affordability makes it an attractive market for investment.
• Favourable tax rates
  Cambodia boasts a favourable tax environment with comparatively low tax rates. This further enhances its appeal as an investment destination for foreign investors.
• Supportive business environment
  The Cambodian Government has implemented measures to facilitate business operations for foreign investors, making the country an enticing investment destination.
• Political stability
  Cambodia provides a stable political environment, ensuring a secure climate for foreign investors.
• Growing middle class
  Cambodia’s middle class is rapidly expanding, resulting in increased disposable income. As a result, there is a growing demand for housing and other goods and services, driving investment in the real estate sector.

The rise in foreign investment in Cambodian real estate has yielded several positive impacts on the country, including:

• Economic growth
  Foreign investment has played a significant role in stimulating economic growth in Cambodia.
• Job creation
  Increased foreign investment has led to job opportunities in sectors such as construction, real estate and tourism.
• Improved living standards
  The influx of foreign investment has contributed to improving living standards across Cambodia.
• Infrastructure development
  Foreign investment has driven the development of essential infrastructure, including roads, airports, ports and power plants.

The government of Cambodia has enacted a number of recent laws and regulations to promote foreign investment in real estate.

The Foreign Investment Trend In Cambodia Real Estate Is Expected To Continue In The Future, Driven By Several Factors, Including The Development Of New:

• condominiums in Phnom Penh and Siem Reap
• commercial centres in Phnom Penh and Siem Reap
• coastal resorts
• industrial parks
• infrastructure projects, such as roads, bridges, ports, railways and airports

With a favourable business environment, political stability and robust economic growth, Cambodia continues to attract FDI. The development of new projects, along with the growing demand for housing and infrastructure, will further fuel this trend in Cambodian real estate in the coming years.