Unsold Developer Inventory After Handover: How It Affects Condominium Owners in Cambodia

Prepared by the NovAsia Editorial Team

Handover does not end a development’s sales cycle.

When a condominium opens, the developer may still control dozens or even hundreds of apartments. Some were never sold. Some returned to stock after cancellation. Others are held for leasing, corporate use, staff accommodation, show units or a later sales campaign. Units that appear sold may also return to the market if buyers fail to complete final payments.

For a new purchaser, this can be convenient. A ready building still offers several floors, views and layouts.

For an existing owner, the same inventory means that the project’s strongest seller remains inside the building.

The developer controls:

• the sales office;
• advertising channels;
• show units;
• agent relationships;
• instalment plans;
• discounts;
• direct buyer enquiries.

A private owner usually has one apartment, one asking price and a much shorter financial runway.

Developer inventory after handover affects more than resale price. It can influence rent, occupancy, service-charge funding, owner voting, management contracts and the date on which owners gain genuine control over the common property.

This article provides general information, not investment, legal or valuation advice on a particular project. Inventory, title status, service-charge obligations, effective prices and governance should be checked for the specific building and date.

Start by defining what “developer inventory” actually means

Not every remaining apartment belongs in the same category.

Possible groups include:

• never-sold units;
• cancelled SPAs;
• defaulted buyer units;
• developer rental stock;
• corporate apartments;
• staff accommodation;
• show units;
• units allocated to landowners or contractors;
• collateral units;
• units in a future phase;
• sold but not handed-over units;
• fully paid units awaiting title;
• apartments still shown online despite being unavailable.

For resale competition, the most relevant category is marketable inventory: units the developer is prepared to sell now or soon.

For the building budget, the relevant issue is legal ownership and the date from which the unit contributes to common costs.

For voting, the relevant issue is who is recognised as the co-owner and how many shares the unit carries.

For occupancy, the issue is whether someone actually lives in or rents the apartment.

A statement such as 90% sold does not answer all four questions.

A useful inventory review separates:

The first discipline is therefore to stop treating all remaining stock as one number.

Why developers retain apartments after completion

There can be neutral or positive reasons.

The developer may intentionally hold:

• premium floors;
• penthouses;
• rare views;
• show units;
• a rental portfolio;
• corporate units.

It may release stock gradually to avoid flooding the market.

A large remaining balance can also indicate a deeper problem:

• price above demand;
• weak layouts;
• poor location;
• dependence on overseas investors;
• high service charge;
• slow handover;
• title uncertainty;
• weak mortgage availability;
• excessive competing supply;
• buyer cancellations;
• reputational damage.

The presence of stock is not a diagnosis by itself.

The better questions are:

• Is the inventory shrinking?
• At what effective price?
• Which unit types remain?
• How old is the stock?
• Is it being rented instead?
• Are cancellations increasing?
• Is the developer changing strategy?

A controlled release of premium units is different from years of repeated discounts on identical one-bedrooms.

The market environment matters

In a supply-rich market, completed inventory may remain for longer.

Market commentary on Phnom Penh in late 2025 described a large standing condominium stock, new completions, price-sensitive demand and slower monitored sales rates. Developers increasingly focused on completing existing projects, improving payment terms and offering more affordable products.

That context does not mean every project has weak absorption.

It does mean that completion does not automatically clear the remaining units.

A developer may respond by:

• holding the official price;
• offering hidden incentives;
• reducing the effective price;
• extending instalments;
• leasing units;
• selling blocks to investors;
• transferring stock to agents;
• using units as security;
• changing the target buyer.

Each strategy affects private owners differently.

The developer sells financing as well as property

A private resale is usually simple:

• agreed price;
• deposit;
• balance at closing;
• perhaps a buyer mortgage.

The developer can offer a wider package:

• low down payment;
• interest-free instalments;
• deferred balloon payment;
• furniture;
• parking;
• free service charge;
• rental guarantee;
• cashback;
• fee support;
• agent commission;
• upgrade;
• trade-in.

This changes the real comparison.

Assume the developer offers a unit for USD 100,000 with three years of interest-free instalments and USD 8,000 of furniture.

A private owner offers a similar apartment for USD 95,000 cash without the same furniture package.

The resale appears cheaper.

The developer package may still be more attractive to a buyer who values financing and convenience.

Private owners therefore compete on effective price rather than list price.

Hidden incentives can matter more than public discounts

Developers often avoid cutting the official price because they want to protect:

• brand positioning;
• earlier buyers;
• bank valuation;
• remaining stock.

Instead, they use:

• rebates;
• furniture credit;
• free management;
• commission;
• deferred payments;
• guaranteed rent;
• transfer-fee support.

The published price might remain USD 2,000 per square metre while the economic deal falls to USD 1,700.

A private owner may list at USD 1,850 and believe they are undercutting the developer.

The buyer compares the full package and concludes that the resale is expensive.

A realistic analysis therefore needs:

• current quotation;
• payment schedule;
• furniture value;
• fees;
• rebates;
• agent commission;
• service-charge holiday;
• financing value.

The sales-office price list is not enough.

Developer rental stock can set the market rent

If the developer keeps a large portfolio, it may establish an internal rental desk.

Its advantages include:

• incoming leads;
• professional photography;
• on-site staff;
• immediate access;
• several layouts;
• standard furniture;
• corporate relationships;
• ability to discount quickly.

A private owner may hand one apartment to the same manager and compete against the manager’s principal.

This creates a conflict of interest.

Important questions include:

• How are rental enquiries allocated?
• Are leads rotated?
• Does the developer’s stock receive priority?
• Are employees paid bonuses for developer units?
• Are private-owner units listed at the same visibility?
• Who sets the advertised rent?
• Is there transparent reporting?

Where the developer controls dozens of units, it can become the practical rent setter for the entire building.

Developer rental stock can also stabilise the project

Not every large rental portfolio is negative.

It can:

• increase occupancy;
• create footfall;
• support retail;
• attract corporate tenants;
• establish a furniture standard;
• generate operating income;
• make amenities feel active.

For a nearly empty building, occupied developer units may be much better than dark unsold apartments.

The risk appears where:

• the developer rents below sustainable market levels;
• private owners receive fewer leads;
• rental information is not transparent;
• the developer can subsidise units in a way private owners cannot;
• the same manager controls both sides without disclosure.

The effect should be judged on occupancy, fairness and long-term pricing rather than on ownership alone.

Unsold units remain part of the building’s economics

Common property serves the whole building.

It must be maintained whether an apartment is occupied or empty.

Sub-Decree No. 126 and the sample internal regulations are based on joint owner responsibility for common-area costs, generally linked to the value or area of each lot.

That creates a practical question:

Who contributes for apartments still owned by the developer?

There is no safe universal answer without the project documents.

Possible models include charging from:

• occupancy approval;
• handover;
• title registration;
• first transfer;
• another contractual date.

Some buildings apply:

• reduced rate for vacant units;
• temporary exemption;
• developer subsidy;
• service charge included in the sale price;
• building-wide operating support instead of unit invoices.

The economics do not disappear.

If the developer owns 40% of the stock, pays no service charge and provides no equivalent subsidy, the gap falls on private owners or appears through reduced services.

Management should disclose:

• number of billed units;
• developer-owned units;
• tariff;
• exemptions;
• subsidy;
• arrears;
• collection rate;
• budget deficit.

Formal invoicing and economic support may differ

In one building, the developer does not pay a separate service-charge invoice for its units but directly pays:

• security;
• staff;
• electricity;
• maintenance;
• repairs.

In another, the developer pays normal invoices but does not cover the launch-stage deficit.

The correct measure is total contribution:

service charges + direct expenses + subsidy + capital support

The support should be documented.

If it depends only on an informal decision by one director, it can disappear during management transition.

A building may look financially stable while the developer quietly pays several suppliers outside the management accounts.

When owners take over, the true cost suddenly appears.

Remaining inventory preserves voting power

The Cambodian co-owned-building framework links important decisions to co-owner shares.

Where the developer remains the registered owner of substantial inventory, it can retain significant influence over:

• manager appointment;
• service charge;
• budget;
• supplier contracts;
• internal regulations;
• short-term-rental rules;
• common-area use;
• signage;
• retail;
• management handover.

This is not automatically abusive.

During the early operating period, the developer may have the strongest technical knowledge and the greatest financial interest in protecting the project’s reputation.

The risk is conflict.

The developer may simultaneously act as:

• seller;
• landlord;
• service-charge debtor;
• manager;
• contractor;
• board controller.

A stronger governance structure uses:

• owner representation;
• conflict disclosures;
• clear share schedule;
• audited accounts;
• related-party contract review;
• transition milestones.

Developer control can protect quality

Premature transfer can also be dangerous.

A fragmented owner group may:

• fail to reach quorum;
• lack technical expertise;
• cut the budget;
• delay repairs;
• change managers too often;
• ignore insurance.

A continuing developer role can preserve continuity.

The problem is indefinite control without accountability.

A stronger early-stage model sets:

• reporting standards;
• owner seats;
• budget approval;
• audit rights;
• conflict procedures;
• transition date or trigger;
• rules for developer-owned units.

The objective is not to remove the developer immediately.

It is to ensure that management gradually becomes accountable to the building rather than remaining an extension of the sales department.

The developer can hold prices while private sellers cannot

A developer with capital and a large portfolio can wait.

A private owner may need cash.

The developer can keep a high list price and use hidden incentives.

A private seller may lower the public price.

This creates a confusing market:

• high official project price;
• lower private resale price;
• even lower effective developer package;
• different rents across identical units.

Reported asking prices become weak evidence.

Completed transactions and full incentive packages matter more.

A large residual portfolio can delay a normal secondary market

In a mature condominium, buyers compare private resales with each other.

In a recently completed building with large developer stock, the first stop is usually the sales office.

The developer controls:

• information;
• documents;
• viewings;
• promotions;
• project narrative.

Private sellers remain secondary.

A normal resale market becomes stronger after:

• developer stock declines;
• private transactions complete;
• title transfers become routine;
• rents are evidenced;
• management has a track record.

Until then, liquidity depends heavily on the developer’s behaviour.

Returned units can create sudden supply

A project may appear close to sold out and then receive a wave of returned stock after:

• final payment deadlines;
• mortgage failure;
• buyer defaults;
• delays;
• assignment restrictions.

Returned units often come from the same investor-heavy categories.

They can enter the market at once and create:

• price competition;
• repeated listings;
• distressed resale;
• lower rent;
• longer marketing periods.

The sold percentage should therefore be read together with:

• cancellation rate;
• amount collected;
• payment schedule;
• final balloon exposure.

Unit composition matters more than the overall balance

A project may have only 10% unsold inventory.

If almost all remaining stock consists of the same one-bedroom layout as the private owner’s unit, the direct competition may still be severe.

Another building may have 25% unsold stock concentrated in penthouses and commercial units, creating much less competition for a standard apartment.

The relevant analysis is by:

• unit type;
• size;
• view;
• floor;
• price;
• payment plan;
• title status;
• furniture;
• rental strategy.

The project-wide percentage can conceal the actual substitute supply.

What private owners can use as an advantage

A resale owner cannot usually match a developer’s financing platform.

They can offer strengths the developer may not have:

• registered title;
• immediate possession;
• proven tenant;
• net-income history;
• better fit-out;
• rare view;
• lower effective price;
• completed defects;
• faster closing;
• verified service-charge account.

These advantages should be documented.

A resale saying ready to move in is weak if the developer also has ready stock.

A resale with clean title, a good tenant and transparent costs can be a genuinely different product.

Worked comparison

Assume two identical units.

Developer unit

• price: USD 105,000;
• 20% down;
• 36-month instalments;
• furniture included;
• one year of service charge free.

Private resale

• price: USD 98,000;
• cash closing;
• registered title;
• current tenant paying USD 650;
• furniture upgraded.

The private unit has a lower nominal price and stronger evidence.

The developer unit has easier financing.

The better choice depends on the buyer’s capital and purpose.

For the private seller, the existence of developer stock does not make resale impossible.

It means the resale must offer a clear economic or documentary advantage.

Questions before buying into a completed project

Ask:

• How many units remain marketable?
• Which unit types remain?
• What are the current effective terms?
• How many units are rented by the developer?
• Who controls rental leads?
• Does the developer contribute to common costs?
• What subsidy is being provided?
• What voting share does the developer retain?
• When will management transfer?
• What happens to supplier contracts after transition?
• How many cancelled units may return?
• Are developer prices falling or only incentives increasing?

The answers should be current and specific.

Red flags

Concern increases where:

• the building has been open for years but inventory remains high;
• discounts grow while official prices stay unchanged;
• the developer does not disclose unit contributions;
• private owners receive fewer rental leads;
• developer-related management controls all information;
• title remains slow;
• returned inventory increases;
• owner governance is postponed indefinitely;
• the building budget depends on undocumented support;
• many identical units remain.

One factor is not enough to reject a project.

Several aligned factors indicate a structural post-handover overhang.

Conclusion

Developer inventory after handover is neither automatically safe nor automatically dangerous.

It can help a new building by supporting management, occupancy and organised leasing.

It can also create long-term competition in:

• resale;
• rent;
• voting;
• management;
• building finance.

The key questions are not only how many units remain.

They are:

• which units;
• at what effective price;
• how quickly the stock is shrinking;
• who pays common costs;
• who receives rental leads;
• how much voting influence remains;
• how governance will transfer.

A stronger completed project can explain those relationships transparently.

A weaker one uses the developer’s continuing control as both the solution to every problem and the reason owners cannot obtain independent information.

Sources

1. Knight Frank Cambodia — Cambodia Real Estate Highlights H2 2025.
2. Royal Government of Cambodia — Sub-Decree No. 126 on the Management and Use of Co-Owned Buildings, 12 August 2009.
3. Royal Government of Cambodia — Sub-Decree No. 126, Annex 1 Sample Internal Regulations.
4. EuroCham Cambodia — Charge Collection in Co-Owned Buildings.
5. Cambodia Investment Review — 2025–2026 market commentary on Phnom Penh condominium supply, price sensitivity and flexible payment strategies.

Frequently asked

Is it always bad if the developer still owns many apartments after handover?

No. The developer may support operations, bring tenants into the building and release stock gradually. The risk increases where inventory remains large for years, is sold through aggressive incentives or is not contributing transparently to building costs.

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

The developer can offer instalments, furniture, discounts, marketing support and a choice of several units, while a private seller normally offers one apartment and expects faster payment.

Should the developer pay service charges on unsold units?

If the developer remains the owner of private units, those units cannot disappear from the building’s economics. The exact charging date, tariff and any temporary exemption depend on title status, internal regulations and project documents.

Can the developer vote using unsold apartments?

Where the developer remains the recognised co-owner of a material share of private units, it may retain substantial voting influence. The exact position depends on registration, the share schedule and the building’s internal regulations.

When does remaining developer stock become less risky?

Risk falls when inventory declines without heavy discounting, the developer contributes fairly to building costs, rental leads are allocated transparently and a credible transition to owner-controlled governance is underway.