Build it and they will come: Apartment boom in Cambodia's capital is being driven by expat demand and a leap of faith

High-rise apartments are springing up across Cambodia's capital, part of a property boom led by expat demand, while developers are also betting the country's growing middle class will shed a traditional distaste for “living on top of each other”.

As once red-hot property markets like Singapore lose steam, frontier markets such as Cambodia are gaining more attention from investors, and that is helping make the construction and real estate industries the Southeast Asian nation's most dynamic engine of growth.

Developers such as Singapore's Oxley Holdings and Teho International are embarking on high-rise upmarket condominiums complete with swimming pools, gymnasiums and river views. Japan's Creed Group as well as Taiwanese and South Korean firms have jumped into the market, while local developers are also building, albeit mostly low-rise apartments.

A lack of condominiums in prime Phnom Penh areas for expats has led to high rental yields for investors. But some experts worry supply could outstrip demand in a few years unless the country's middle class moves away from a traditional preference for houses with land.

With an economy of only $16.7 billion, Cambodia could be very slow in shifting to high-rise living as its urban middle class, while growing, remains small.