As Phnom Penh grows rapidly, its real estate market is expected to rebound in 2025, driven by an expanding middle class, rising foreign investment, and improved infrastructure. However, different market sectors—residential, commercial, mixed-use, and land sales—will experience distinct trends.
Residential Market: Growth Focused on Affordable Housing
Phnom Penh’s residential market is shifting towards more affordable housing options, driven by demand from both locals and expatriates. While luxury condos and high-end villas have dominated in recent years, the next phase will likely prioritize mid-range housing for young professionals, growing families, and retirees. Areas like Sen Sok and Dangkor are expected to see the highest demand, offering reasonably priced properties with new infrastructure like schools, malls, and better transportation links. The completion of the Phnom Penh Light Rail and road expansions will further increase accessibility to these neighborhoods.
Chbar Ampov, just south of the city, is also gaining traction. Its proximity to the city center and improving infrastructure make it appealing to middle-income buyers and developers. Townhouses and affordable condos in this area are likely to attract strong investor interest, especially as suburban demand grows.
For steady returns, investors should focus on mid-priced condos and townhouses in these emerging districts. While areas like BKK1 and Chamkarmon will remain popular with wealthier expats and diplomats, more affordable properties in Sen Sok, Dangkor, and Chbar Ampov are poised for stability.
Commercial Real Estate: Growing Demand for Office and Retail Spaces
As Phnom Penh rebounds from pandemic-related slowdowns, demand for office and retail spaces is increasing. Businesses—both local and international—are returning, and the trend toward hybrid and flexible workspaces will continue to influence demand. Areas like BKK and the Russian Boulevard are expected to remain key locations for high-end office and retail developments, thanks to their proximity to multinational corporations, embassies, and shopping malls.
Toul Kork and the Aeon Mall area are also emerging as prime spots for retail and office developments. With new commercial projects and better transportation connections, these districts will see growth across both sectors.
Mixed-Use Developments: Integrating Work, Live, and Play
Mixed-use developments are expected to be one of the most dynamic sectors in 2025. These projects, which blend residential, commercial, and leisure spaces, appeal to the growing urban population seeking convenience. Toul Kork is set to see significant mixed-use development, with new residential complexes offering shopping, dining, and entertainment. As the demand for “live, work, and play” environments grows, Toul Kork is likely to attract both local and international investors.
Similarly, Chroy Changvar, near the Tonle Sap River, has potential for waterfront mixed-use projects. With new bridges and roads improving access, this area is poised for development, offering both high returns and strong appeal to locals and expatriates alike.
Land Sales: Expanding to Suburban Areas
As Phnom Penh’s urban sprawl continues, land sales will shift toward suburban and peri-urban areas. Investors seeking long-term opportunities should look at Dangkor, Por Sen Chey, Kamboul, and Chbar Ampov, where larger plots are available at relatively affordable prices. These areas will see rapid urbanization over the next year, driven by both residential and industrial projects.
The Takhmao area, along National Road 2, is also becoming increasingly attractive for large-scale commercial and industrial investments as infrastructure improves. Similarly, Arey Ksat, across the Tonle Sap River, is seeing growing interest for waterfront developments, particularly residential and leisure-focused projects.
Top Investment Picks for 2025
For the best returns in 2025, mixed-use developments in Toul Kork stand out. This area is on the verge of transformation, with new projects combining commercial, residential, and retail spaces. As the city grows, demand for such integrated developments will remain strong, especially among young professionals seeking convenience. Early investments here could see substantial appreciation.
Affordable housing in Sen Sok and Dangkor also offers solid returns. These neighborhoods are benefiting from infrastructure improvements, including better roads and new schools, making them increasingly attractive to both local buyers and renters. Mid-range housing here is expected to see steady demand.
Chroy Changvar is another district to consider, especially along its northern waterfront. With ongoing infrastructure upgrades, including new bridges and roads, this area is becoming more attractive for luxury residential and mixed-use developments.
For our money, Arey Ksat, with its riverside appeal and massively transformational Mekong Quay development, may be the dark horse that wins the race not just in 2025 but over the next decade.
tl;dr
Phnom Penh’s real estate market in 2025 offers diverse opportunities. The focus will be on affordable housing in emerging districts, commercial and mixed-use developments, and land sales in suburban areas. Investors targeting Toul Kork’s mixed-use projects, affordable housing in Sen Sok and Dangkor, and waterfront developments in Chroy Changvar and especially Arey Ksat’s Mekong Quay will see strong returns. Count us bullish on Phnom Penh real estate in 2025 and beyond. 🙏
