Industrial zones: Cambodia plays its card ahead of the 2029 deadline

With the scheduled loss of its preferential trade advantages by 2029, Cambodia must reinvent its industrial model. A EuroCham forum bringing together public decision-makers, investors, and European experts provided, on June 9 in Phnom Penh, a clear-eyed assessment of the challenges and opportunities facing the sector.

Special Economic Zone – Sihanoukville

More than 1.3 million workers, seven out of ten of whom are women. Six hundred and forty-two factories spread across thirty-three special economic zones. These figures, impressive at first glance, conceal a more fragile reality: Cambodia’s industrial model is at a decisive turning point.

This was the conclusion that opened the 2026 Forum on Industrial Parks and Special Economic Zones, organized by the Real Estate & Construction Committee of EuroCham Cambodia on June 9 at Novotel Phnom Penh BKK1. Under the direction of Michel Cassagnes, Managing Director of Archetype Cambodia, Laos and Vietnam, the discussion brought together government representatives, developers, logisticians, and construction specialists around a central question: how can a cost-based competitive advantage be transformed into a sustainable industrial positioning?

Competitiveness to be defended

Kim Kinkesa, Managing Director of Advantage Property Services, presented a market overview that highlights both the strength—and the vulnerability—of the sector. Cambodia offers factory rents at USD 3.05 per square meter per month, significantly lower than the USD 4.70 seen in Vietnam, and long-term land leases available at USD 69.25 per square meter. Approved special economic zones have attracted USD 13.8 billion in investment across 8,304 hectares.

However, occupancy rates remain highly uneven: 90% in Sihanoukville, but only 42% in Banteay Meanchey province. This disparity illustrates persistent imbalances between zones equipped with robust infrastructure and those struggling to attract tenants.

“The next phase of industrial development will require a far more coordinated ecosystem—from national zoning to reliable logistics networks, including skilled labor, energy efficiency, and investor confidence. In a world where uncertainty has become the norm, Cambodia must build an industrial ecosystem that is not only competitive, but resilient.” Kim Kinkesa, Managing Director, Advantage Property Services

The 2029 deadline: a structural shift

The major unknown shaping all discussions is 2029. That year, Cambodia will officially graduate from Least Developed Country (LDC) status, resulting in the loss of the preferential schemes it currently benefits from: the European Everything But Arms program and U.S. access under MFN/GSP. For Virak Ouproum, Deputy Director General of the General Department of Industry at the Ministry of Industry, Science, Technology and Innovation (MISTI), time is running out: the country must urgently move up the value chain into higher value-added sectors—electronics, automotive, precision engineering, and agro-industry—while strengthening infrastructure, energy networks, and workforce training.

In response to this challenge, speakers highlighted the complementarity between special economic zones—with their customs facilities, shared infrastructure, and investment incentives—and non-special industrial parks, which offer greater flexibility for companies focused on the domestic market. The rise of eco-industrial parks, capable of attracting high-quality tenants while meeting growing environmental and social responsibility expectations, emerged as one of the most promising directions.

International standards as a lever for attractiveness

François Magnier, International Director and Design Director of IDEC Group Asia, presented case studies from the group’s global portfolio—more than 1,500 industrial projects in 22 countries—illustrating how architectural quality, LEED certification, and tailor-made logistics infrastructure enhance a park’s attractiveness. This serves as a benchmark model for Cambodian developers seeking to position themselves in the high-end segment amid increasing regional competition.

The second panel discussion—moderated by Ross Wheble, Vice-Chairman of the EuroCham committee and Director of Knight Frank Cambodia—addressed the full lifecycle of an industrial park, from financing to occupancy, including planning and delivery. Energy reliability, logistics integration, and construction quality emerged as the true differentiating factors in a rapidly evolving market.

“The fundamentals are there: competitively priced land availability, access to labor, and favorable trade frameworks. But the gap between Cambodia’s potential and its realization as a serious industrial destination lies in planning and execution. Forums like this matter because they bring these conversations into the same room.” Ross Wheble, Vice-Chairman, Real Estate & Construction Committee of EuroCham Cambodia

The EuroCham Forum on Industrial Parks and Special Economic Zones 2026 was sponsored by Sika, Standard Construction & Engineering (SCE), and Menard.