Market Insights and External Factors to Look at When Investing in a Condominium in Phnom Penh
By: Hoem Seiha, Partner and RE Advisor at ERA Data Intel
Market insights and knowledge of the supply and demand are very crucial for you as an investors looking to invest in a condominium--whether the market is narrow or broad for your idea to successfully make a gain on the investment at this time. There you will look at:
Condominium Supply
About 520 condominium buildings scatter across Phnom Penh capital, and many of them are located in CBD areas. Total of these condos combined gives a market supply of about 142,700 units, 76,600 of which are residential ones. Up to now, most of the condominiums were and have been recently completed and in services. The majority of the units are owner-occupied are some left for rental or run as serviced apartments or condotels. See infograph below:
Most of condominium projects are located in central business areas (CBDs) which are inner circle of the city, and the boom and bust period was between 2016 to 2023. Condominiums also spread outside the city center to the suburbs during this boom and bust period. See map below for the scatter and illustration.
Tourism and Lodging Supply
Tourists are the main driver for your investment model into the condominium as serviced apartments or condotels, as they would alternatively rent a condotel when they are visiting Phnom Penh city, especially for long term stay.
According to ERA Data Intel, number of international tourists coming to Cambodia was almost 6 millions, while it is forecast to reach about 8 millions by 2030. The current supply of accommodations, including all lodging types, is about 95,000 keys/ units and it will reach about 11,000 keys/ units by 2030. Most of the supplies are within Phnom Penh and Siem Reap city.
Apartments, Condotels, and Hotels
Out of the all type accommodation supplies, apartments, condotels, 3-5 star hotels will represent half of the supply by 2030. In the event of your looking to invest in a condominium, that will contribute to the short or long stay accommodation supply. According the data, the market still has rooms for new supply.
Hotel Occupancy Rate
Occupancy rate for hotels was about 75% and so did serviced apartments and condotels across Phnom Penh city. Therefore, the risk is optimal for your investment plan.
Macro Economy and External Factors
Cambodia is listed as is one of the fast growing economy, largely thanks to exports of agricultural, textile and garment products and the improved tourism industry. The direct foreign investments contributes to the major growth, while the real estate investments drive the a large part of the growth, with the support of mortgage and real estate financing schemes from banking sector.
Despite there is a lag for mortgage rate in these recent years, the recent stimuli by the central bank will help improve mortgage and real estate related financing.
Improved Infrastructure for Tourism, Travel and Transport
Techo International Airport (the new Phnom Penh International Airport) is set to become a world-class airport and will be the 9th largest in the world. It is expected to feature hotels, a conference center, office buildings, an eco-park, and private residences. The first terminal was 40% completed by the end of 2022, and the airport is expected to be operational by 2025, with a phased rollout that sees the first terminal finished in 2023, handling 13 million passengers per year.
This will enable direct flights from international destination into Phnom Penh, resulting in a flock of tourists and business visitors to Phnom Penh city. That is the promising future for supporting your investment plan in Phnom Penh's condominiums.
Contact R.E. Advisor
For additional details or real estate investment consultation, please contact Mr. Hoem Seiha via telephone: +855-12-699-553 / +855-10-699-553 | Telegram: t.me/Hoemseiha | E: hoem.seiha@eracambodia.com | Condo listings on Telegram channel: https://t.me/seiha_era_condo_listing
Disclaimer:
This analysis is an opinion made solely by Hoem Seiha, an independent real estate advisor and analyst for ERA Data Intel, based on some criteria and metrics deemed reliable for the current market. The opinion DOES NOT reflect any viewpoints of ERA Cambodia and therefore, we are not responsible for any loss or damage pertaining to reliance on this analysis for your investment.
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