Real estate investment is among the most popular investments in Cambodia. This sector receives a great amount of attention and investments from both domestic and international investors. The majority of real estate investments rely heavily on residential and commercial real estate. Although these two types of real estate investments are widely known to the population, there are various types of real estate investments. Besides residential and commercial real estate, Cambodia also offers a great environment for other types of real estate investments. Want to find out more? Continue reading down below to learn more about real estate investments in Cambodia!
The real estate sector in Cambodia offers a variety of investment opportunities for investors with reasonably high returns on investment. Beyond residential real estate and commercial real estate, Cambodia also offers good investment opportunities for other real estate investment types due to the increase of urban centres, and development plans across the country. Below are some real estate types in Cambodia that can be very profitable:
Investment in Raw Land
With the increasing urban developments and government development plans, investment in raw land is a long-term commitment with high ROI. Investors can invest in raw land by purchasing a piece of land and holding it until it increases its value. With the onward trend of this market, raw land keeps increasing its market value for the upcoming years. According to CBRE 2023, the mid-year report shows the potential land area at peak for future development which includes the area surrounding Toul Kork, Sen Sok, Chroy Chongvar, and Russey Keo. With investment in raw land, investors can either invest in one piece of land or a large land plot in developing areas. Since this investment is a long-term commitment with a good return, it would be a great investment for those with stable income and funds left after deducting their monthly expenses.
Investment in Warehouses or Industrial Real Estate
Besides the increasing demand for commercial properties, there is also an underlying demand for industrial properties. Industrial real estate includes warehouses, manufacturing facilities such as factories, refineries, workshops, etc. In the 2023 mid-year report, CBRE offers a notable prediction on the rising use of modern logistics facilities and purpose-built warehouses in the next three years. Moreover, with the expansion of retail routes in Phnom Penh, warehouses and other industrial real estate will see a new surge of demand in the near future. Investment in warehouses or industrial real estate would make an ideal investment for those having existing land ownership in nearby urban centres, and also for those looking for a feasible investment with a more immediate ROI than investment on raw land.
Hospitality Real Estate Investment
After the ease of the spread of COVID-19, tourism in Cambodia has seen a stable rebound from both international and domestic travellers. This is a good opportunity to invest in hospitality property, taking advantage of the current affordable property prices and potentially high profit once tourism spikes. Hospitality property consists of buildings such as hotels, travel centres, amusement facilities, restaurants, and other facilities to entertain tourists. CBRE calculates that hospitality property will continue to increase in demand with drivers such as sport-related events, new infrastructure developments, and recovery on accommodation rates pushing forward tourist arrivals. Both international and domestic business owners and corporations may want to take advantage of these new investment opportunities in Cambodia.
House Flipping as Investment
House Flipping is a common investment method in the United States and Western countries, yet it is a new concept in Cambodia. This investment takes on a strategy with high risk and high return on investment. House flipping will require investors to purchase a property that is undervalued and then renovate it for sale at a higher price. Housefliiping, especially in the popular residential and commercial centres in Phnom Penh, can offer high returns for investors. Owing to a generous amount of properties requiring renovations to match the demand from a younger generation, a house flipping investment can be a great potential investment. Although house flipping requires funding for both purchasing and renovations, anyone with a stable income and prospects for medium-size investment can also invest in house flipping.
Real Estate Crowdfunding
One more type of real estate investment that is very practical and applicable to investors ranging from limited funds to large funds can participate in is real estate crowdfunding. Real estate crowdfunding provides a platform for third-party real estate investment. With crowdfunding, real estate investment is made more accessible to average investors and offers individual investors smaller shares of a property. There are multiple crowdfunding platforms in Cambodia to help local investors gain profits through real estate investment. Although this type of investment is still relatively new, it offers great opportunities for small-scale investors to enter the real estate market.
Real Estate Investment Trusts
In addition to real estate crowdfunding, real estate investment trusts or REITs are also seen in Cambodia. REITs are a type of investment that is like mutual funds with a company operating trusts for multiplied real estate investments. Investors of REITs will get paid in passive income from the company that manages those properties. A recent publication showcases rising investment with trust companies in Cambodia. This real estate investment provides opportunities for foreigners to invest and own landed property in Cambodia. In addition, individual investors can also enjoy a great deal of investment opportunities with REITs since they have a wider range of real estate projects to invest in. REITs can be either publicly traded or privately traded depending on which shares you are interested in investing.
Real estate investment widens its range to more than just residential and commercial properties. Investment in real estate in Cambodia can be done through various means such as Raw land Investments, Industrial Real Estate, Hospitality Investments, House Flipping, Real Estate Crowdfunding, and REITs. With a high rate of ROI, international and domestic investors are highly encouraged to invest in Cambodia's real estate market. However, it is still essential for investors to take caution in the investments they plan to make nonetheless. Investors are recommended to research both the property and market before making the investments to avoid loss on investment. For convenient and helpful assistance on real estate investment in Cambodia, contact the CBRE real estate team for more information.
