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As of September 2025, Phnom Penh's rental market offers attractive yields for investors with 1-bedroom apartments averaging $350-$550 monthly and gross rental yields reaching 6.96-7.68%.
The capital city presents distinct rental opportunities across different property types, from high-end condos in Chamkarmon (BKK1) commanding premium rates to emerging suburban areas like Sen Sok and Chbar Ampov offering strong growth potential. Understanding the rental landscape becomes crucial whether you're considering investment property or planning to relocate to Cambodia's economic hub.
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Phnom Penh rental prices range from $350-$550 for 1-bedroom apartments to $73-$5,500 for villas, with gross yields averaging 6.96-7.68% for apartments.
Prime districts like Chamkarmon and Daun Penh command the highest rents, while emerging areas like Sen Sok and Chbar Ampov offer strong growth potential for investors.
| Property Type | Average Monthly Rent (USD) | Typical Size (sqm) | Rent per sqm (USD) | Gross Yield Range |
|---|---|---|---|---|
| 1-bedroom Apartment | $350-$550 | 50-70 | $7-$11 | 6.5-7.5% |
| 2-bedroom Condo | $400-$1,000 | 80-117 | $7-$9.5 | 6.0-7.0% |
| 3-bedroom Condo | $550-$2,000 | 120-180 | $8-$12 | 5.5-6.5% |
| Villa | $73-$5,500 | 144-500 | $7-$15 | 5.0-7.0% |
| Office Space | $500-$3,113 | 33-283 | $10-$24 | 4.5-6.0% |
| Commercial Villa | $2,000-$5,500 | 200-500 | $10-$18 | 5.0-6.5% |
| Short-term Rental | $367 (monthly avg) | 50-100 | $12-$20 | 7.0-9.0% |
What are the current rental prices for different property types in Phnom Penh?
Phnom Penh's rental market shows distinct pricing tiers across property categories as of September 2025.
For apartments and condominiums, 1-bedroom units command $350-$550 monthly with a median of $550, while 2-bedroom properties range from $400-$1,000 monthly. Larger 3-bedroom condos span $550-$2,000 monthly depending on location and amenities. These residential units typically measure 50-117 square meters, with the median apartment size around 70 square meters.
Villa rentals present the widest price spectrum, from budget options at $73 monthly in peripheral districts to luxury properties reaching $5,500 monthly in prime areas like Chamkarmon and Daun Penh. The average villa spans 144-500 square meters with a median of 274 square meters. Location significantly impacts pricing, with Sangkat Chrouy Changva villas reaching $197 monthly and Daun Penh properties topping $92 monthly for comparable sizes.
Commercial properties offer diverse rental opportunities, with office spaces priced at $10-$24 per square meter monthly. Mid-sized office units typically rent for $500-$3,113 monthly, while commercial villas designed for business use command $2,000-$5,500 monthly for 200-500 square meter properties. Traditional shophouses average $1,500 monthly, providing street-level retail opportunities.
Short-term rental properties targeting tourists and business travelers show strong potential, with typical nightly rates of $35 median and $77 for premium units, translating to monthly averages around $367 for well-managed properties.
How do rental prices differ across Phnom Penh's neighborhoods and districts?
Phnom Penh's rental market demonstrates clear geographic pricing patterns reflecting infrastructure development and international demand.
The most expensive districts include Chamkarmon (particularly BKK1), Daun Penh, and Toul Kork, representing the city's central business and diplomatic zones. These prime districts attract expatriate tenants, embassy staff, and international corporate employees willing to pay premium rates for proximity to business centers and established amenities. Properties in these areas command the highest per-square-meter rates due to their central location and international tenant base.
Emerging growth districts show the fastest rental appreciation, including Chbar Ampov, Sen Sok, Kambol, Dangkor, and Prek Pnov. These peripheral areas benefit from improved infrastructure projects and expanding urban development, making them attractive to local professionals and families seeking value. Infrastructure improvements in these districts drive both rental demand and capital appreciation prospects.
Budget-friendly options concentrate in Sen Sok, Dangkor, Russey Keo, and Chroy Changvar, offering affordable housing for local residents and cost-conscious expatriates. These districts provide essential housing stock for Cambodia's growing middle class while maintaining accessibility to central Phnom Penh.
Short-term rental performance peaks in tourist-focused districts including BKK1, Riverside, and Daun Penh, where proximity to attractions, restaurants, and nightlife generates higher occupancy rates and nightly premiums. These areas consistently outperform suburban districts for vacation rental investments.
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What is the rental cost breakdown by property size and surface area?
Phnom Penh rental rates demonstrate consistent per-square-meter pricing across property categories, with premium locations commanding higher rates.
| Property Category | Typical Size Range (sqm) | Monthly Rent Range (USD) | Rent per sqm (USD) |
|---|---|---|---|
| Studio Apartment | 25-40 | $250-$400 | $8-$12 |
| 1-bedroom Apartment | 50-70 | $350-$550 | $7-$11 |
| 2-bedroom Condo | 80-117 | $400-$1,000 | $7-$9.5 |
| 3-bedroom Condo | 120-180 | $550-$2,000 | $8-$12 |
| Small Villa | 144-200 | $400-$1,500 | $7-$10 |
| Large Villa | 300-500 | $1,500-$5,500 | $10-$15 |
| Office Space | 33-283 | $500-$3,113 | $10-$24 |
Smaller residential units typically achieve higher per-square-meter rates due to efficiency premiums and strong demand from single professionals and young couples. Office spaces command the highest per-square-meter rates, reflecting commercial real estate premiums and business location values.
What are the total rental costs including all fees, taxes, and service charges?
Understanding Phnom Penh's complete rental cost structure requires accounting for various fees and taxes beyond base rent.
Management fees typically add $1-$2 per square meter monthly, or 5-10% of total rent for professionally managed properties. These fees cover building maintenance, security services, and common area upkeep in modern developments. Property owners using management companies should factor these costs into net yield calculations.
Tax obligations include the Transfer of Immovable Property Tax (TOIP) at 0.1% annual property value and rental income tax of 10% for Cambodian citizens and 14% for foreign property owners. VAT at 10% applies to rental income when properties are let through registered companies, adding significant cost considerations for commercial operators.
Utility costs average $0.25 per kilowatt-hour for electricity and $0.35 per cubic meter for water, with tenants typically responsible for consumption costs. Air conditioning usage significantly impacts electricity bills in Cambodia's tropical climate, often adding $50-$150 monthly to tenant expenses.
Insurance and sinking fund contributions remain optional but recommended for property protection and building maintenance reserves. Service charges for amenities like swimming pools, gyms, and 24-hour security vary by development quality and location.
Foreign property investors should budget 15-25% of gross rental income for taxes, fees, and maintenance costs when calculating net rental yields and investment returns.
How do financing costs and mortgage obligations affect rental profitability?
Mortgage financing significantly impacts Phnom Penh rental property profitability due to regional interest rate conditions.
Current mortgage rates in Cambodia and the broader Southeast Asian region range from 5.3-8.5% annually as of September 2025. These rates directly affect leveraged property investments, with higher borrowing costs reducing net cash flow from rental operations. Investors using mortgage financing typically see net yields 1.5-2% lower than gross yields due to interest payments and associated borrowing costs.
Gross rental yields averaging 6.96-7.68% for Phnom Penh apartments become net yields of 5.5-6% after accounting for financing costs, taxes, and operational expenses. Highly leveraged investors face particular cash flow challenges when mortgage payments exceed monthly rental income, requiring additional capital contributions to maintain properties.
The financing impact varies significantly based on loan-to-value ratios and property types. Conservative financing at 50-60% LTV maintains positive cash flow for most prime district properties, while aggressive 80%+ LTV financing may require additional capital injections during vacancy periods or maintenance requirements.
Interest rate sensitivity affects long-term investment strategy, as rising rates could compress returns further while falling rates enhance profitability. Investors should stress-test their investment assumptions against potential rate increases of 1-2% above current levels.
Cash purchases eliminate financing costs entirely, allowing investors to capture full gross yields minus operational expenses and taxes, typically achieving 5.5-6.5% net returns in quality locations.
Who are the typical renters in Phnom Penh's market, both local and international?
Phnom Penh's rental market serves diverse tenant demographics with distinct preferences and payment capabilities.
Local tenants primarily include young professionals working in Cambodia's growing service sector, middle-class Cambodian families, and domestic migrants seeking urban opportunities. These renters increasingly favor emerging suburban districts like Sen Sok, Dangkor, and Chbar Ampov, where modern amenities combine with affordable pricing. Local tenants typically prefer longer lease terms and prioritize value-oriented properties with good transport connections.
Foreign tenants concentrate in specific categories including expatriate professionals, embassy staff, NGO workers, and international corporate employees. These renters gravitate toward prime districts like BKK1, Daun Penh, and Toul Kork, willing to pay premium rates for international-standard housing, security, and proximity to business centers. Expatriate tenants often require furnished properties and shorter-term lease flexibility.
The short-term rental market attracts tourists, business visitors, remote workers, and digital nomads seeking temporary accommodation. These guests prefer centrally located properties in tourist districts with easy access to attractions, restaurants, and transportation hubs. Peak seasons and business conferences drive significant demand fluctuations in this segment.
Investor demographics include Cambodian diaspora returning from abroad, Chinese and Vietnamese nationals expanding regional property portfolios, and Western expatriates seeking regional income diversification. Each investor group brings different risk tolerances, financing capabilities, and return expectations to the market.
Understanding tenant profiles helps property investors target appropriate locations, amenities, and lease structures to maximize occupancy and rental returns.
What are the current vacancy rates across different property types and locations?
Phnom Penh's vacancy rates vary significantly across property sectors and geographic locations as of September 2025.
Office properties show the highest vacancy rates, with Grade A office buildings achieving 64% occupancy (36% vacancy) and Grade B offices reaching 62% occupancy. The commercial office sector faces ongoing challenges from economic uncertainty and changing business space requirements, creating opportunities for strategic investors in well-located buildings.
Residential vacancy rates remain relatively low in prime districts, with areas like Chamkarmon, Daun Penh, and Toul Kork maintaining under 10% vacancy due to consistent expatriate and professional demand. These central locations benefit from established infrastructure, international amenities, and proximity to business centers.
Peripheral residential areas including Kambol and Chbar Ampov experience higher vacancy rates as supply increases faster than absorption. However, these emerging districts show improving fundamentals as infrastructure development and urban expansion continue attracting residents.
Short-term rental properties achieve median occupancy rates around 32%, with best-in-class properties reaching 78% occupancy in prime tourist districts. Airbnb and vacation rental performance depends heavily on location, property quality, and professional management.
Commercial properties beyond offices, including retail and shophouses, maintain 60-70% occupancy in prime areas, reflecting broader retail sector challenges and evolving consumer preferences toward online commerce.
Seasonal variations affect vacancy rates significantly, with tourist-focused short-term rentals experiencing higher vacancy during Cambodia's rainy season and peak occupancy during dry season months when international visitation increases.
What rental yields can investors expect from different property categories?
Phnom Penh rental yields present attractive opportunities across property categories, with apartments leading investment returns.
| Property Type | Gross Rental Yield | Net Rental Yield | Risk Level |
|---|---|---|---|
| Prime District Apartments | 6.96-7.68% | 5.5-6.5% | Low-Medium |
| Suburban Condos | 7.0-8.0% | 5.8-6.8% | Medium |
| Luxury Villas | 5.0-7.0% | 4.0-6.0% | Medium-High |
| Office Buildings | 4.5-6.0% | 3.5-5.0% | High |
| Commercial Villas | 5.0-6.5% | 4.0-5.5% | Medium-High |
| Short-term Rentals | 7.0-9.0% | 5.5-7.5% | High |
| Shophouses | 6.0-7.5% | 4.5-6.0% | Medium |
Apartment investments consistently deliver the most stable yields, with gross returns of 6.96-7.68% translating to net yields of 5.5-6.5% after expenses. These properties benefit from strong local and international tenant demand, lower vacancy rates, and manageable maintenance requirements.
Short-term rental properties offer higher potential yields of 7.0-9.0% gross, but require active management and face seasonal occupancy variations. Well-located and professionally managed vacation rentals in tourist districts can achieve net yields of 5.5-7.5%, making them attractive for hands-on investors.
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How have rental rates and yields changed compared to previous years?
Phnom Penh's rental market demonstrates steady growth with improving fundamentals over recent periods.
Year-over-year performance from Q1 2025 compared to 2024 shows stable to growing yields, with apartment yields reaching 6.96% in Q1 2025, slightly up from 6.8% in 2024. This improvement reflects market maturation and sustained demand despite broader economic uncertainties affecting the region.
Five-year trends indicate moderate rental rate increases, particularly in central districts where international demand remains strong. Yields have remained attractive but show slight compression due to rising capital values outpacing rental growth. Prime district properties experienced the most significant capital appreciation, affecting yield calculations while providing strong total returns for early investors.
CBRE data indicates rental rates for serviced A-grade apartments increased 6-12% year-over-year, demonstrating premium property strength. However, office and retail segments remained flat or declined, reflecting commercial real estate challenges and changing business space requirements.
Short-term rental segments show increasing popularity and investor interest, particularly in central tourist districts. Airbnb and vacation rental yields have improved as professional property management services develop and tourist arrivals recover to pre-pandemic levels.
Market maturation brings improved transparency, professional property management services, and better financing options, supporting continued yield stability even as competition increases among investors seeking Phnom Penh rental income opportunities.
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How does the short-term rental market compare to long-term rentals?
Phnom Penh's short-term and long-term rental markets serve different investment strategies with distinct risk-return profiles.
Short-term rental properties targeting tourists and business travelers achieve higher nightly rates, with typical nightly charges of $35 median and $77 for premium properties. These translate to monthly equivalent rates around $367 for well-managed properties, often exceeding comparable long-term rental rates in prime locations.
Occupancy rates significantly impact short-term rental performance, with median occupancy around 32% and best-in-class properties achieving 78% occupancy in prime tourist districts. Seasonal variations create income volatility, with peak tourist seasons generating substantial premiums while rainy seasons may see significant occupancy drops.
Long-term rentals provide stable monthly income with lower management requirements. Traditional apartment leases offer predictable cash flow, longer tenant relationships, and reduced vacancy costs. Property owners avoid the intensive management, marketing, and guest services required for successful short-term operations.
Geographic performance differs substantially between rental strategies. Short-term rentals excel in BKK1, Riverside, and Daun Penh tourist districts, while long-term rentals perform consistently across broader geographic areas including emerging suburban districts.
Investment returns favor short-term rentals in peak locations, with potential gross yields of 7.0-9.0% compared to 6.0-7.5% for comparable long-term properties. However, short-term rentals require higher operational involvement, professional cleaning services, and active guest management to achieve optimal performance.
Regulatory considerations increasingly affect short-term rental operations, with property owners needing proper business registration and tax compliance for vacation rental activities.
What are the best investment opportunities in Phnom Penh's current rental market?
Phnom Penh's rental market offers several compelling investment opportunities for different investor profiles and risk tolerances.
Mid to high-end condominiums in prime districts including BKK1, Daun Penh, and Toul Kork represent the most stable investment choice. These properties combine strong rental yields, low vacancy rates, and consistent tenant demand from expatriates and professionals. International-standard buildings with amenities like swimming pools, gyms, and security services command premium rents while maintaining high occupancy.
Commercial spaces in emerging growth corridors including Sen Sok, Chbar Ampov, and Kambol offer capital appreciation potential alongside rental income. These districts benefit from ongoing infrastructure improvements, expanding business development, and increasing residential populations creating local commercial demand.
Short-term rental properties in downtown tourist districts present opportunities for active investors seeking higher yields. Well-located and professionally managed Airbnb properties in BKK1, Riverside, and Daun Penh can achieve gross yields exceeding 7-8% with proper management and marketing.
Affordable apartments in expanding southern and western suburbs target Cambodia's growing middle class. These properties offer strong rental demand from local families and professionals while providing capital appreciation as urban development continues expanding outward from central Phnom Penh.
Industrial and warehouse properties benefit from Special Economic Zone development and manufacturing sector growth. These specialized properties serve increasing demand from logistics companies and manufacturers establishing Cambodian operations.
Investment success requires careful location selection, understanding target tenant demographics, and maintaining properties to international standards that justify premium rental rates in Phnom Penh's competitive market.
How do Phnom Penh rental prices compare with other regional cities?
Phnom Penh's rental market positioning within Southeast Asia reveals competitive advantages and regional context for investment decisions.
Rental rates place Phnom Penh among higher-cost Asian cities, with 1-bedroom median rent of $550 ranking as the 7th highest in Asia according to recent comparative studies. This positioning reflects the city's economic development, international business presence, and limited high-quality housing supply relative to demand.
Compared to regional capitals, Phnom Penh offers different value propositions. Bangkok commands higher absolute rental rates but delivers lower yields around 5-6% due to elevated property prices. Ho Chi Minh City shows similar rental levels with slightly lower yields of 5-6%, reflecting Vietnam's more mature property market.
Jakarta presents comparable yield opportunities with established apartment markets achieving similar 6%+ returns, while Manila and Hanoi offer comparable rent levels and yields ranging 5-7% depending on location and property quality.
Phnom Penh's competitive advantage lies in combining relatively high rental yields of 6.5-7.7% with ongoing economic growth and infrastructure development. The city offers emerging market growth potential while maintaining sufficient political stability and legal framework to support property investment.
Forecast expectations for 2025 indicate continued 5-10% property price growth in Phnom Penh, with yields expected to remain stable as rental demand keeps pace with capital appreciation. The 1-5-10 year outlook remains positive based on continued urbanization trends, infrastructure project completion, and expanding industrial development in Special Economic Zones.
Regional comparison suggests Phnom Penh offers attractive risk-adjusted returns for investors seeking Southeast Asian property exposure with higher yields than more mature markets like Bangkok or Ho Chi Minh City.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Cambodia versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
What are the future rental market forecasts for Phnom Penh?
Phnom Penh rental market forecasts indicate continued growth supported by urbanization trends and economic development projects.
Short-term projections for the next 12 months suggest continued rental rate stability with 3-5% increases likely in prime districts. Growing expatriate populations, expanding international business presence, and limited high-quality housing supply support sustained rental demand. Office and commercial sectors may face continued pressure from economic uncertainties and changing business space requirements.
Five-year outlook remains optimistic based on Cambodia's economic growth trajectory and ongoing infrastructure development. Major projects including new roads, bridges, and urban planning initiatives will likely drive rental demand in currently peripheral districts. Emerging areas like Sen Sok, Chbar Ampov, and Kambol should see significant rental growth as infrastructure improvements increase accessibility and attractiveness.
Ten-year forecasts depend heavily on continued political stability, economic policy consistency, and regional integration progress. Successful development of Special Economic Zones, manufacturing sector growth, and tourism recovery could drive substantial rental demand increases. However, supply increases from new development projects may moderate rental growth rates while providing more options for tenants.
Vacancy rates should remain low in prime districts but may increase in peripheral areas as new supply comes online. Commercial and office sectors face uncertain prospects depending on economic recovery and changing business operational patterns.
Investment strategy implications suggest focusing on prime district residential properties for stability, emerging district properties for growth, and specialized sectors like industrial properties for economic development-driven demand. Diversification across property types and locations provides protection against sector-specific risks while capturing broad market growth.
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Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Phnom Penh's rental market offers compelling opportunities for investors seeking Southeast Asian property exposure with attractive yields ranging from 6.5-7.7% for quality residential properties.
Prime district apartments and emerging suburban developments present the best combination of yield stability and growth potential, while short-term rentals offer higher returns for active investors willing to manage seasonal variations and operational complexity.
Sources
- Cam Realty Service - Cheap Apartments for Rent in Phnom Penh
- LinkedIn - Why Phnom Penh's Rent is 7th Highest in Asia
- Global Property Guide - Cambodia Rental Yields
- RealEstate.com.kh - Phnom Penh Rentals
- AirROI - Phnom Penh Khan Daun Penh Report
- BambooRoutes - Phnom Penh Price Forecasts
- Global Property Guide - Cambodia Price History
- Cambodia Investment Review - Q1 2025 Market Performance
- World Property Journal - Cambodia Real Estate News 2025
- Cambodia Investment Review - CBRE Mid-Year Review 2025