Rental Yields and ROI in Phnom Penh Apartments | Investment Potential
Phnom Penh’s real estate market continues to attract both local and international investors, thanks to its robust rental yields and promising prospects for return on investment (ROI). Here’s a detailed look at the current landscape for rental yields and ROI in Phnom Penh apartments.
Rental Yields in Phnom Penh: 2025 Snapshot
- Gross rental yields for apartments in Phnom Penh range from 5.01% to 8.5%, with a city average of 6.96% in Q1 2025.
- Condominiums typically outperform other property types, with many projects offering 6% to 8% annual yields; select high-quality developments can even reach 10% to 12%, though these are rare.
- For instance, a $100,000 investment in a well-located condo (like Le Condé BKK1) can generate about $8,000 in annual rental income, equating to an 8% gross yield.
Net Rental Yields: The Real Picture
While gross yields are attractive, investors should account for costs such as property management, maintenance, and taxes:
- A case study of a $60,000 condo in the Russian Market area (including all fees and expenses) showed a net yield of 3.52% at 75% occupancy.
- Many investors report net yields typically hover between 1.5% and 4%, depending on location, occupancy, and management efficiency.
Rental Rates by Apartment Size (2025 Averages)
| Apartment Size | Average Monthly Rent (USD) |
|---|---|
| 1-bedroom | $550 |
| 2-bedroom | $1,000 |
| 3-bedroom | $1,800 |
| 4+ bedrooms | $4,500 |
Best Areas for Investment
- BKK1 (Boeung Keng Kang 1): High rental yields, strong expat demand, and luxury amenities make this area a perennial favorite.
- Chamkarmon: Known for upscale condos and vibrant lifestyle amenities, attracting high-end tenants and investors.
- Toul Kork & Sen Sok: Emerging districts with affordable entry points and growing rental demand; ideal for investors seeking capital appreciation.
- 7 Makara: Rapidly developing, offering lower entry prices and long-term growth potential.
Factors Affecting ROI
- Location: Proximity to business centers, international schools, and amenities drives both rental demand and capital appreciation.
- Property Type & Quality: Newer, well-managed condos in prime areas command higher rents and occupancy rates.
- Market Trends: The Phnom Penh rental market is recovering post-pandemic, with rising demand for mid-range and serviced apartments, while high-end and affordable segments are stabilizing.
Investment Considerations
- Occupancy Rates: Post-pandemic recovery has improved occupancy, but some segments still face high vacancies, especially in oversupplied areas.
- Capital Appreciation: While predicting price growth is challenging, Phnom Penh’s economic resilience and ongoing urban development suggest favorable long-term prospects.
- Costs: Be mindful of ongoing expenses—management fees, maintenance, taxes—which can significantly impact net returns.
Conclusion: Is Phnom Penh a Good Bet for Apartment Investors?
Phnom Penh offers some of the most attractive gross rental yields in Asia, particularly in central and up-and-coming districts. However, realistic net yields are often lower than headline figures, so careful due diligence and cost management are essential. For investors seeking a blend of stable rental income and the potential for capital gains, Phnom Penh’s apartment market remains a compelling option in 2025—especially for those who choose the right location and property type. You will find a lot of properties as well as regular real estate information about Cambodia on homeinvestcambodia.com
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