Unsold Developer Apartments After Completion: How They Affect Existing Owners

Prepared by the NovAsia Editorial Team

Completion of a building does not mean the end of sales. A developer may still hold dozens or hundreds of apartments after the condominium opens.

Some have never been sold. Others return after cancelled contracts. Some are retained for rental, corporate use or later sale. Certain apartments may be described as sold but remain unpaid, unregistered or capable of returning to the market.

A wide choice in a completed building can be attractive to a new buyer. For an existing owner, the same inventory means that the most powerful competitor remains inside the project. The developer controls the sales office, advertising, demonstration apartments, payment plans, incentives and much of the incoming enquiry flow.

The developer may sell the apartment next door for less than a private owner while also participating in management and voting.

Unsold inventory therefore affects more than price. It can influence rent, service charges, owner governance, the building budget and the timing of genuine management handover.

Define What Counts as Unsold Inventory

Apartments described as "remaining with the developer" may include:

• units never sold;
• cancelled contracts;
• defaulted buyer contracts;
• apartments retained for rent;
• corporate accommodation;
• show units;
• apartments transferred to contractors or partners;
• pledged collateral;
• later-phase units;
• sold but unhanded-over apartments;
• fully paid apartments without individual title;
• listings that remain online after sale.

The relevant number depends on the question.

For price competition, count apartments that the developer is genuinely prepared to sell now.

For the operating budget, identify the legal owner and the date on which service charges begin.

For voting, establish registered ownership and the relevant share.

For occupancy, determine whether the apartment is actually used.

"90% sold" does not answer all of these questions.

Why Inventory May Remain After Completion

Unsold stock is not automatically evidence of failure. A developer may deliberately retain premium floors until the building is finished, maintain a rental portfolio or release apartments gradually.

A large and persistent balance can nevertheless indicate:

• overpricing;
• layouts that do not match demand;
• weak location;
• dependence on foreign investors;
• ineffective marketing;
• high service charges;
• construction delays or defects;
• project reputation problems;
• limited mortgage availability;
• oversupply of similar units;
• contract cancellations;
• uncertainty over titles.

The important questions are how the stock changes over time, the effective transaction price and the method by which units are being placed.

Market Conditions Can Prolong the Effect

Knight Frank's review of the Phnom Penh condominium market for the second half of 2025 estimated existing supply at more than 63,000 apartments and described price-sensitive demand and slow observed sales rates in monitored projects.

Such market-level information should not be treated as proof of conditions in one building. It does explain why remaining inventory may persist after completion rather than disappearing immediately.

A developer can respond in several ways:

• hold the public price;
• offer hidden incentives;
• reduce the effective price;
• rent apartments;
• sell a bulk portfolio;
• restructure buyer instalments;
• pledge units;
• delay release.

Each choice affects private owners differently.

The Developer Competes Through Finance as Well as Price

A private seller usually offers a straightforward resale: an agreed price, deposit and payment of the balance through the transfer process.

A developer may add:

• low initial payment;
• interest-free instalments;
• a large deferred balance;
• furniture;
• temporary service-charge exemption;
• a rental guarantee;
• upgraded finishes;
• parking;
• payment of some registration costs;
• a cash-payment discount;
• higher agent commission;
• free management.

Two apartments with the same stated price can therefore have very different economic value.

For example, the developer offers an apartment for USD 100,000 with three years of interest-free instalments and an USD 8,000 furniture package. A private owner asks USD 95,000 in cash without furniture. The developer's offer may still be more attractive despite the higher headline price.

A private owner may need to compete through:

• a lower effective price;
• an existing tenant;
• a better view;
• superior fit-out;
• an issued individual title;
• a scarce layout;
• faster closing.

Effective Price Matters More Than the Public Price List

A developer may avoid reducing the official list price to protect the project brand and earlier buyers. Instead, it may provide:

• rebates;
• furniture credits;
• free service charges;
• delayed payments;
• rental guarantees;
• additional agent incentives.

The published price might remain USD 2,000 per square metre while the economic transaction value is closer to USD 1,700.

A private owner who lists at USD 1,850 may believe they are offering a discount, while buyers see the developer's complete package as cheaper.

Effective competition should therefore be assessed using:

• payment timetable;
• rebates;
• agent incentives;
• furniture;
• fees;
• taxes;
• financing value;
• service-charge waivers;
• rental commitments.

The official price list is only one part of the comparison.

The Developer May Also Compete for Tenants

Where the project company controls a large completed portfolio, it may operate an in-house leasing desk.

Advantages include:

• direct enquiry flow;
• show apartments;
• professional photography;
• on-site staff;
• corporate contracts;
• rapid price changes;
• consistent furnishing.

A private owner who appoints the same manager may be competing against that manager's largest client.

Questions include:

• Who receives the first qualified tenant lead?
• Are developer apartments offered at lower rents?
• Are staff paid extra to fill developer stock?
• Is the private owner's apartment marketed equally?
• How are corporate enquiries allocated?
• Are performance reports separated?

These rules should be disclosed in the management agreement.

Developer-led rental can also help the building. It may increase occupancy, support retail, create cash flow and establish an operating standard. The risk is not the existence of the programme, but undisclosed discrimination or a pricing strategy that private owners cannot match.

Unsold Apartments Must Appear in the Building Budget

Common areas serve the building whether apartments are occupied or empty.

The practical question is who funds apartments still owned by the developer.

Projects use different trigger dates:

• issue of an occupancy or completion approval;
• handover;
• title registration;
• first sale;
• first occupation.

Other arrangements may include:

• a reduced empty-unit rate;
• a developer subsidy;
• charges included in the future sale price;
• temporary exemptions;
• direct payment of selected suppliers.

The economics cannot disappear. If 40% of the apartments are excluded and the developer does not separately fund the shortfall, private owners either pay more or receive poorer service.

Management should disclose:

• number of chargeable apartments;
• developer-owned share;
• applicable rate;
• exemptions;
• arrears;
• direct subsidy;
• resulting deficit.

A Ledger Charge and Real Economic Support Are Not the Same

In one project, the developer may not transfer a standard service charge for each apartment but may directly pay:

• staff;
• electricity;
• cleaning;
• equipment servicing.

In another, it may pay normal apartment invoices but leave the start-up deficit unfunded.

The total contribution should therefore be assessed as:

service charges + direct operating payments + subsidy + capital replacements

Direct support should be documented. When owner management begins, supplier contracts paid by the developer may end, creating an abrupt budget gap.

Remaining Inventory Preserves Voting Influence

If the developer remains the registered owner of many apartments, it may hold substantial influence over:

• management appointment;
• budget approval;
• service-charge changes;
• contracts;
• rental rules;
• transfer of management;
• capital work.

Developer involvement can be useful during the early years because it brings technical knowledge, staff and financial capacity.

The risk increases where there is no:

• transition timetable;
• independent owner representation;
• audit;
• conflict policy;
• transparent vote record;
• disclosure of related-party contracts.

A strong model expands owner participation as units are sold. A weak model preserves indefinite control without corresponding accountability.

Public Price Support Can Coexist with Weak Resale Prices

A developer can wait longer than an individual seller. It may maintain a high public price to:

• protect the value of remaining stock;
• avoid upsetting earlier buyers;
• preserve collateral value;
• protect the brand;
• avoid acknowledging weak demand.

Meanwhile, private owners may complete transactions at lower prices because they need liquidity.

The building can develop two markets:

• a primary asking-price market;
• a secondary transaction market.

A buyer and lender are likely to focus increasingly on completed transactions rather than the developer's brochure.

If the developer later faces financial pressure, discounted sales can reset negotiation expectations and valuation comparables for every owner.

Research from other Asian condominium markets has examined how developer financial pressure can create pricing effects for private resales. That work is comparative context, not proof of the effect in a particular Cambodian project. The local conclusion must be supported by actual transactions.

A Bulk Sale Changes the Building's Ownership Profile

The developer may sell dozens of apartments to one investor or accommodation operator.

Possible benefits:

• rapid reduction of inventory;
• stronger collection;
• higher occupancy;
• professional rental operation.

Possible disadvantages:

• concentrated voting power;
• downward pressure on rent;
• a more serviced-apartment-style environment;
• dependence on one tenant source;
• a large volume returning to market at once if the investor exits.

The percentage unsold is therefore not enough. Ownership concentration also matters.

A building in which the developer owns 30% and an institutional landlord owns another 25% operates differently from one with hundreds of independent owners.

The Sale of the Last Developer Apartment Is a Major Transition

When the developer exits, the building may lose:

• its largest owner;
• budget subsidy;
• sales office;
• on-site defect team;
• advertising channel;
• leasing desk;
• informal coordinator;
• supplier relationships.

By then, the condominium should be able to:

• contract independently;
• operate bank accounts;
• maintain insurance;
• collect charges;
• manage staff;
• keep records;
• enforce warranties;
• make owner decisions.

Reduction of inventory is beneficial only where the management structure is ready to stand alone.

Estimating the Real Inventory

Useful evidence may include:

• title records;
• current developer price list;
• verified sales-office inventory;
• active listings;
• handover records;
• management's owner register;
• service-charge ledgers;
• cancelled-contract information;
• mortgage or pledge records;
• agent stock lists.

Online advertising is difficult to count because one apartment may be duplicated by many agents. A reserved apartment may be presented as sold even where completion depends on future payments.

A reasoned range with a confidence level is usually more credible than false precision.

When a Large Balance May Be Manageable

The position may be controlled where:

• inventory is declining;
• the developer remains financially stable;
• effective pricing is not collapsing;
• apartments are maintained;
• charges or subsidies are transparent;
• the leasing desk treats private owners fairly;
• owner participation is expanding;
• titles are being issued;
• occupancy is increasing;
• the management transition is documented.

When Remaining Inventory Becomes a Serious Risk

Warning signs include:

• repeated effective price reductions;
• weak private resale completion;
• many identical listings;
• unclear contributions for developer apartments;
• a growing operating deficit;
• the developer acting as seller, manager and dominant leasing competitor;
• owners having little meaningful vote;
• inventory heavily pledged;
• delayed titles;
• mass rental depressing rates;
• little reduction years after completion.

Questions for an Existing Owner or Resale Buyer

Ask:

• How many apartments can the developer sell today?
• What is the effective price after all incentives?
• Which apartments are developer rentals?
• What charges are raised against them?
• What direct subsidy is provided?
• How are tenant leads allocated?
• What voting share remains with the developer?
• Are related-party management contracts disclosed?
• What happens after the sales office closes?
• Is the owner-governance structure operational?

The answers should refer to documents and recent data rather than a percentage from the original launch.

The Practical Conclusion

Unsold apartments after handover are not only the developer's commercial problem. They affect the price, rent, budget and governance of every private owner in the building.

A large balance creates competition through instalments, furniture, incentives and direct advertising. It may preserve developer control and alter cost allocation. It can also support occupancy and the transition period where the developer contributes transparently and manages the stock responsibly.

The decisive questions are:

• Is inventory falling?
• What is the effective transaction price?
• Does the developer fund its share of building costs?
• How are rental leads allocated?
• What voting influence remains?
• Is the condominium ready for the developer's eventual exit?

This article is for general information and is not investment, legal or valuation advice. Inventory, incentives, ownership, service-charge contributions and voting power should be verified for the particular project at the transaction date.

Sources

1. Knight Frank Cambodia — Cambodia Real Estate Highlights, second half of 2025.
2. Royal Government of Cambodia — Sub-Decree No. 126 on the Management and Use of Co-Owned Buildings.
3. Annex 1 to Sub-Decree No. 126 — model internal regulations for a co-owned building.
4. EuroCham Cambodia — materials on service-charge collection in co-owned buildings.
5. Cambodia Investment Review — materials on Cambodian real-estate market trends and management of completed inventory.
6. Kanis Saengchote — research on developer leverage and fire-sale effects in the Thai condominium market, used only as comparative context.

Frequently asked

Is it always a bad sign if the developer still owns many apartments after completion?

No. The risk depends on how quickly the inventory is falling, the real selling price, whether the developer contributes to building costs and whether management and rental allocation are transparent.

Why is it difficult for a private seller to compete with the developer?

The developer may offer instalments, furniture, fee waivers, direct marketing and a choice of several apartments. A private seller usually offers one apartment and a less flexible payment timetable.

Should the developer pay service charges on unsold apartments?

The cost does not disappear from the building's economics. The charging date, rate, subsidy and any exemption depend on title status, internal regulations and project agreements and should be disclosed.

When does the remaining inventory become less risky?

Risk generally falls when stock declines without aggressive discounting, the developer's contribution is transparent, private owners are not disadvantaged in rental allocation and a functioning owner-governance structure is being established.