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Cambodia’s industrial parks and special economic zones (SEZs) are entering a critical period as the country prepares for the loss of key trade preferences and seeks to attract higher-value manufacturing investment, according to government officials, developers and industry leaders gathered at EuroCham Cambodia’s Industrial Parks & Special Economic Zones Forum 2026 in Phnom Penh on June 9 [S-104].
The discussions come as Cambodia continues to position itself as a regional manufacturing destination, supported by competitive labour costs, relatively affordable industrial land and strong export growth. However, speakers warned that maintaining momentum will require significant improvements in infrastructure, workforce skills, energy reliability and industrial planning [S-104].
The state of the sector
Presenting an overview of the sector, Virak Ouproum, Deputy Director General of the Directorate General of Industry at MISTI, said Cambodia had 3,266 operating factories as of April 2026, employing more than 1.31 million workers. Women account for approximately 70 percent of the country’s industrial workforce [S-104].
Within Cambodia’s network of special economic zones:
- 33 operational SEZs host 642 factories employing more than 200,000 workers
- 20 additional industrial parks accommodate roughly 150 factories and over 90,000 employees
- $13.8 billion in cumulative investment across more than 8,300 hectares of active industrial land [S-104]
The LDC graduation challenge
Despite the sector’s growth, Cambodia’s upcoming graduation from Least Developed Country (LDC) status in 2029 was highlighted as a major structural challenge [S-104].
The transition will gradually reduce access to several preferential trade arrangements that have underpinned Cambodia’s export-led manufacturing expansion, including the European Union’s Everything But Arms (EBA) scheme and certain U.S. trade preferences.
To remain competitive, speakers argued Cambodia must accelerate its move into higher-value industries — electronics, automotive manufacturing, precision engineering and agro-processing — while continuing to invest in logistics infrastructure, energy systems and workforce development [S-104].
LDC graduation is also the point at which Cambodia’s labour-cost competitiveness gets tested against its actual productivity, not just its wages. CDRI data cited in a September 2026 op-ed puts Cambodia’s manufacturing productivity growth at only around 2 percent annually between 2008 and 2021, with overall labour productivity growth of about 2.5 percent a year over 2010–2021 — figures this platform examines in more depth in its two-economies analysis [S-109]. Once preferential trade access erodes after 2029, Cambodia will be competing on cost and capability rather than tariff advantage — which makes that productivity trend, not just the higher-value-industry wish list above, the real long-run constraint on whether SEZ tenants can remain competitive.
One structural cushion against the LDC-preference loss is already visible in the trade data: the Regional Comprehensive Economic Partnership (RCEP) — which does not depend on LDC status — absorbed 61.2 percent of Cambodia’s $52.1 billion in total trade in January–August 2026. Within that, Cambodia’s exports to RCEP partners rose 8.9 percent to $7.22 billion while imports from the bloc grew faster, 25 percent to $24.71 billion, with China, Vietnam, Singapore, Japan and Thailand the top five partners. Ministry of Commerce spokesperson Penn Sovicheat linked the RCEP relationship directly to FDI flows into the industrial sector [S-106]. It is not a substitute for EBA or US preference access, but it is a second trade architecture SEZ tenants can lean on as 2029 approaches.
Industrial rents and occupancy: the numbers
Kim Kinkesa, Managing Director of APS Cambodia (formerly CBRE Cambodia), presented market data showing Cambodia continues to offer a significant cost advantage relative to regional competitors [S-104]:
| Metric | Cambodia | Vietnam (North & South) |
|---|---|---|
| Ready-built factory rent (per sqm/month) | ~$3.05 | ~$4.70 |
| Long-term industrial land lease (50-year avg) | ~$69.25/sqm | Higher |
Occupancy rates vary sharply by location. Sihanoukville’s industrial zones have reached approximately 90 percent occupancy, while some emerging locations, including Banteay Meanchey, remain under 50 percent [S-104].
Rent and land cost are only half of “is Cambodia still cheap?” — the other half is labour, and it is worth a precision fix on where that negotiation actually stands. Six union federations initially floated $250.66 a month for 2027 (up from the current $210) as one proposal on the table [S-105], but that is not the state of play in the formal wage round. At the fifth tripartite minimum-wage discussion, chaired by Labour Minister Heng Sour, most unions proposed a $15.30 increase, with only some pushing the full +$40.60 to roughly $250.60; employers held at $210, offering only the existing $2.50 transport allowance, and the next meeting is set for Friday, 18 September [S-107]. Read the $250.66/$250.60 figures as a union ask, not a settled union demand or a likely landing point. Set against that negotiation, the sector’s scale: MLVT counts the garment, footwear and travel-goods base at 1,800-plus factories and branches employing roughly 1.1 million workers, and Jan–Aug 2026 exports from that base reached $11.76 billion, up 7.2 percent — apparel and textiles $8.78B (+7.3%), footwear $1.5B (+7.5%), travel goods $1.48B (+6.5%) — about 48 percent of total export value [S-108]. That is the counterweight to the $3.05-versus-$4.70 rent comparison above: Cambodia’s cost advantage over Vietnam rests on land and rent staying cheap even as a genuinely large, still-growing export sector negotiates its wage floor upward.
Kinkesa said Cambodia’s next phase of industrial development depends on more than cost competitiveness:
“However, the next phase of industrial development will require a much more coordinated ecosystem — from national zoning and reliable logistics networks to skilled labour, energy efficiency, sustainability, transparency and investor confidence.” [S-104]
Post-LDC industrial strategy
A panel discussion involving representatives from the Cambodian Investment Board, MISTI and eco-industrial park specialists focused on how Cambodia can strengthen its industrial offering as global investor requirements evolve.
Key takeaways:
- SEZs continue to provide advantages for export-oriented manufacturers through streamlined customs procedures, investment incentives and shared infrastructure
- Non-SEZ industrial parks remain attractive for businesses focused on domestic markets due to greater operational flexibility and potentially lower costs
- Eco-industrial parks are increasingly viewed as a way to attract multinational manufacturers seeking stronger ESG credentials across their supply chains [S-104]
François Magnier, International Director and Design Director of IDEC Group Asia, presented examples from industrial projects across 22 countries, highlighting how logistics integration, sustainability standards and purpose-built infrastructure influence long-term tenant demand [S-104].
The execution gap
Ross Wheble, Vice-Chairperson of EuroCham Cambodia’s Real Estate & Construction Committee and Country Head of Knight Frank Cambodia, captured the consensus:
“What came through clearly this afternoon is that the fundamentals are there: land availability at competitive rates, access to labour, conducive trade frameworks, and the continued growth in exports and expansion of the manufacturing ecosystem despite disruptive external factors. But the gap between Cambodia’s potential and its realisation as a serious industrial destination comes down to forward planning and execution.” [S-104]
Industry leaders concluded that stronger coordination between government agencies, developers, logistics providers and construction firms will be essential if Cambodia is to successfully move beyond its traditional manufacturing strengths and establish itself as a higher-value industrial hub in Southeast Asia.
What this means for property investors
For investors tracking Cambodia’s property market, the industrial and SEZ sector offers a fundamentally different risk profile from the residential condo or borey markets:
- Industrial land leases ($69.25/sqm for 50-year terms) represent a comparatively stable institutional-grade asset class, underpinned by export demand rather than speculative foreign buyer flows
- Occupancy divergence between Sihanoukville (90%) and Banteay Meanchey (under 50%) mirrors the broader pattern of demand concentration around established logistics and port infrastructure
- The LDC graduation timeline (2029) creates both urgency and opportunity — zones that adapt to higher-value manufacturing and ESG standards are likely to outperform those that compete purely on labour cost
The full EuroCham Cambodia Industrial Parks & SEZs Forum was organised by EuroCham’s Real Estate & Construction Committee and sponsored by Sika, Standard Construction & Engineering and Menard [S-104].
Sources
[S-104] Cambodia Investment Review — “Cambodia Faces Post-LDC Test as Industrial Parks and SEZs Seek Next Growth Phase, EuroCham Forum Hears” (June 12, 2026) https://cambodiainvestmentreview.com/2026/06/12/cambodia-faces-post-ldc-test-as-industrial-parks-and-sezs-seek-next-growth-phase-eurocham-forum-hears/
[S-105] CamboJA News — “Unions Seek $250.66 Minimum Wage for Garment Workers in 2027” (13 Sep 2026) https://www.cambojanews.com/unions-seek-250-66-minimum-wage-for-garment-workers-in-2027/
[S-106] Khmer Times — “Cambodia’s RCEP exports reach $7.22 bln, up 8.9%” (13 Sep 2026) https://www.khmertimeskh.com/502023157/cambodias-rcep-exports-reach-7-22-bn-up-8-9/
[S-107] Khmer Times — “Unions seek up to $40.60 minimum wage increase for 2027, employers hold at $210” (14 Sep 2026) https://www.khmertimeskh.com/502023554/unions-seek-up-to-40-60-minimum-wage-increase-for-2027-employers-hold-at-210/ Fifth tripartite wage-round discussion, chaired by Labour Minister Heng Sour: most unions propose a $15.30 increase, some seek the full $40.60 (to ~$250.60); employers hold at $210, offering only the existing $2.50 transport allowance; next meeting Friday 18 September 2026.
[S-108] The Star (Xinhua) — “Cambodia makes US$11.76 billion from garment exports in first eight months, up 7.2 per cent” (12 Sep 2026) https://www.thestar.com.my/aseanplus/aseanplus-news/2026/09/12/cambodia-makes-us1176-billion-from-garment-exports-in-first-eight-months-up-72-per-cent Jan-Aug 2026 garment, textile, footwear and travel-goods exports of $11.76B (+7.2% from $10.97B): apparel/textiles $8.78B (+7.3%), footwear $1.5B (+7.5%), travel goods $1.48B (+6.5%), ~48% of total export value (Ministry of Commerce); MLVT sector denominators of 1,800+ factories/branches and ~1.1 million workers.
[S-109] Cambodianess — “Can productivity growth replace reliance on low-cost labour in Cambodia?” (15 Sep 2026) https://cambodianess.com/article/can-productivity-growth-replace-reliance-on-low-cost-labour-in-cambodia Op-ed citing CDRI data: labour productivity growth ~2.5%/year (2010-2021), manufacturing ~2%/year (2008-2021), services near-zero, agriculture ~7.6%/year; figures attributed to CDRI, not the op-ed itself.