Why Is the BKK1 Area in Phnom Penh, the Capital of Cambodia, Attracting So Much Attention?

Author: Anna Araki / Anna Advisors Co., Ltd.

Because BKK1 is located in the very center of Phnom Penh, it is an attractive location for residents, new businesses, and condominium and hotel developers. Its presence shows no sign of weakening, and it continues to be the hottest district in Phnom Penh.
A major reason is that it is surrounded and interconnected by four of the busiest roads in the city: Sihanouk Boulevard to the north, Mao Tse Toung Boulevard to the south, Norodom Boulevard to the east, and Monivong Boulevard to the west.

Thanks to its constantly changing mix of hotels, restaurants, diverse offices, rooftop and ground-floor bars, numerous chic cafés, and stylish boutiques, BKK1 maintains high pricing levels and remains extremely popular.

BKK1 is also the location of choice for new brands entering the Cambodian market, especially international brands.

The reasons are that it is the top location in the city for high-end residences and apartments, which attracts a large number of expatriates, and that people who live or work in the surrounding area generally have high discretionary spending power.

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Table of Contents

1. The Appeal of BKK1 in Phnom Penh
2. New Brands Choose BKK1
3. Property Prices in BKK1
4. New Projects Under Development in BKK1
5. What Is the Future of BKK1?

The Appeal of BKK1 in Phnom Penh

BKK1 is one of the most attractive and important districts in Phnom Penh, and it is therefore clear that it is also one of the most popular areas in this growing city (the data supports this, and we will introduce it later).

There is no doubt that one of the major reasons is its location: it is surrounded and interconnected by four of the busiest roads in the city—Sihanouk Boulevard to the north, Mao Tse Toung Boulevard to the south, Norodom Boulevard to the east, and Monivong Boulevard to the west. These are street names that many people who come to live in this city become familiar with early on.

BKK1 maintains high price levels and enjoys strong popularity because it has a constantly changing mix of retail establishments: hotels, restaurants, diverse offices, rooftop and ground-floor bars, numerous chic cafés, and stylish boutiques.

New Brands Choose BKK1

Simon Griffiths, Managing Director of The Mall Company, states that BKK1 is often chosen as the location for new brands entering the Cambodian market, particularly international brands.
Either AEON 1 or BKK1 tends to be chosen as the place where new brands open their first store and then expand from there. The reasons are that BKK1 is the most upscale residential and apartment location in the city, which brings together many expatriates, and that the people who live or work in the surrounding area have significant discretionary spending power.

In 2022, more than 99 brands newly entered the Cambodian market, and nearly 350 brands expanded their presence.

Meanwhile, more than 600,000 square meters of retail space were added to the capital, and nearly 250,000 square meters are still under development. During the pandemic, retail prices and occupancy rates naturally declined, but in BKK1 there were sweeping changes in the offerings of food and beverage, hotels, retail, and groceries.

Global performance and lifestyle brand 361° has newly joined the area; local company Scarlett Fiber offers tailor-made fashion with local designs; and brand shops such as Adidas, Charles & Keith, Pedro, and Xando are found around the city.

BKK1 caters to every taste, offering a wide mix of international franchise cuisines, fine dining restaurants, and local Cambodian food on street corners, making it an attractive area for residents, businesses, and tourists alike.

Restaurants such as Pizza 4P’s opened their first Phnom Penh location on the Sisowath Quay riverside (still extremely popular) and recently opened their second branch in BKK1 in 2023. The flagship store of Brown Café and the Phnom Penh headquarters of ABA Bank are also located here, and new themed cafés like 2D Cambodia are gaining popularity.

High-rise buildings feature outdoor spaces such as Penh 278, and the area retains its charm with hidden whisky bars, authentic Khmer noodle houses, Japanese sushi restaurants, and famous local and international franchises from the United States, Europe, and Asia (Starbucks, Café Amazon, Papa John’s Pizza, Domino’s Pizza, Carl’s Jr., KFC, etc.) all coexisting along the bustling streets within the sangkat.

Where else can you sample local and imported craft beers (Embargo, Cerevisia, Duplex), wander through whisky specialty bars such as Odin, get excited together with hardcore fans at sports bars like Score, join backpackers singing in clubs, and enjoy a meal while taking in a dazzling skyline?

Rooftop bars such as Highground Skybar and Baitong are also stylish spots offering panoramic views of the city.

However, the area is highly diverse.

Although the district is amazingly diverse, the ever-increasing number of condominiums stands out, and in some streets major changes have occurred as property owners have accepted high offers from developers. Popular spots among foreign residents—such as the hostel Mad Monkey and bar/restaurant Aussie XL—have moved out of the area, and Zeppelinhas closed permanently.

Even so, the area still has several Cambodian schools and international schools, and the number of families who want to live in BKK1 is not decreasing, as Bluebird British International School, Invictus International School, and iCAN British International School are all within walking distance.

On top of that, supermarkets such as Lucky Supermarket, Super Duper, AEON MaxValu, and the new FairPlus Express, along with the growth of online shopping, have made it even easier to keep household supplies stocked.

The area’s first—and still only—mall, Chip Mong Noro Mall, opened in 2020, adding a cinema, retail space, food outlets, and a new meeting point for BKK1. Griffiths adds that the area is “characterized by the absence of large-format stores; rents are too high to secure big spaces, and there are hardly any large spaces in the first place.”

He then concludes, “Ultimately, the growth of BKK1 will be constrained by the available infrastructure, namely roads and parking. If the area becomes inconvenient, and the number of customers who can visit is limited by traffic conditions, and if the demographics within the catchment area can no longer grow, there will be a limit to the number of retail stores the area can support, and it will reach saturation.”

Property Prices in BKK1

According to the latest data from Cambodia’s Ministry of Economy and Finance, land prices in Boeung Keng Kang I range from USD 4,900 to USD 10,000 per square meter, which is said to be USD 1,000 per square meter higher than in Orussey I, the next most expensive area in the capital. In other words, land within BKK1 is far from affordable.

However, because BKK1 is the hottest location in Phnom Penh, the highest land prices in the capital are demanded here. Compared with other regional capitals such as Bangkok and Hanoi, though, prices are still relatively reasonable.

Rental prices for offices, retail, and condominiums have all declined in recent years due to the combined financial impact of the pandemic, but BKK1 still remains among the top three most developed sangkats in the capital.

According to CBRE, there were 59 “greennet” construction projects (under construction, partly built, or on hold) in the area in 2022, of which 30 were residential, 12 were mixed-use, and 9 were office developments.

In Phnom Penh, 900,000 square meters of office space were added in 2022, with a healthy share secured in central areas such as BKK1. Just under 600,000 square meters are still under development.

In addition, 24,000 hotel rooms are scheduled to be added to the market in 2022.

New Projects Under Development in BKK1

Examples of new condominium and apartment projects currently under development in BKK1 include the following:

■ Le Condé BKK1 (Scheduled for 2024)
A 43-storey building planned to feature street-level retail and boutique reading spaces along BKK Street, a sky jogging track, indoor pool and fitness center, children’s playground, immersive sky garden, co-working space, rooftop sky bar, infinity pool, and more.

■ Flora Suites (Scheduled for 2024)
A 38-storey mixed-use complex of condominiums and offices, offering a sky pool, club, and sky restaurant.

■ Time Square 306 (Scheduled for 2025)
A 45-storey development including a gym, kids’ play area, game room, infinity pool, and a deck area with gardens.

■ Golden Tower 322 (Scheduled for 2023)
Already a landmark building, this tower in the heart of the capital will offer both office and residential space, with an infinity pool, jacuzzi, open-air hot baths, sauna room, gym, sky bar, and outdoor recreation areas.

Recently Completed Residential Projects

Recently completed residential projects include:

■ J Tower 2
A 43-storey Japanese condominium offering a gym, spacious parking, boxing ring, café, pool, jacuzzi, and sky bar.

■ L’attrait
A 26-storey high-end condominium developed by a Japanese company, completed in 2021.

■ M Residence
A 29-storey condominium added to BKK in 2021, featuring a sky bar, sky pool, and gym center.

■ Picasso Garden City
A mixed-use building featuring a hanging garden, banquet hall, infinity and paddling pools, gym, international business offices, F&B outlets, and the Picasso Art Auction Center.

What Is the Future of BKK1?

High land prices have not discouraged developers from building new condominiums, mixed-use residential developments, or hotels, and with further growth in tourist numbers expected, more brands and outlets are likely to appear in BKK1. Accor has announced that Cambodia’s first Mercure Hotel, Mercure Phnom Penh Boeung Keng Kang 1, will open in 2027.

Griffiths adds, “BKK1 remains a very attractive location, so there is constant turnover in retail tenants, and the retail real estate sector in the area continues to be very vibrant.”

Urban planning and sangkat-level planning have traditionally not been strong features of this city, but the authorities need to show some degree of foresight. If BKK is to become the future hub of urban life, retail, and gastronomy in Phnom Penh, ideas could include strengthening heritage preservation, pedestrianizing streets 51, 57, and 63 in the evenings and on weekends, and incorporating more communal culture and street-style festivals within the sangkat.

Griffiths further notes, “The drawbacks of BKK1 are that the roads become congested, especially during rush-hour peaks and school drop-off and pick-up times, and that there is little parking (curbside parking serves as a kind of relief measure, but it only adds to congestion on the narrow roads).”

It is possible to pedestrianize parts of BKK1, but the lack of zoning and the many stakeholders involved make it extremely difficult.

Does the area want to become a bright, Tokyo-style downtown neighborhood, or a Sukhumvit-style attraction with diverse ambitions but a traffic nightmare?

The identity of BKK1 is constantly changing, but because land is the only finite resource, BKK1 will likely continue to modernize and diversify while maintaining its investment power, remaining a globally renowned hotspot and an attractive hub that serves Cambodians, foreign tourists, and residents alike.

Reference:
https://www.khmertimeskh.com/501238448/why-is-boeung-keng-kang-such-a-hotspot/