Companies in the real estate sector from across Southeast Asia, includ- ing architects, developers, construction and consulting firms, are increasingly becoming involved in Yangon’s luxury real estate projects. The number of high-end de- velopments in Yangon has increased signifi- cantly in recent years, and the boom looks set to continue, with new projects being planned or launched almost every week at present. Over the past year and particularly the last quarter, more and more companies from across the Asean region have expand- ed their businesses into Myanmar to take advantage of this opportunity. This has resulted in a transformation of the market landscape from before 2011, when a major- ity of Yangon’s higher-end projects – par- ticularly in the residential space – were car- ried out from conception to completion by Myanmar’s major conglomerates. As would be expected, firms from Singapore and Thailand are the most active in the Yangon market, due to their geographical proximity to Myanmar and the frequent, direct flights to Yangon.
Several Singaporean property firms, includ- ing regional giant Keppel Land, have had a presence in the Myanmar market for a long time. Keppel has been in Myanmar since 1993, and currently owns and manages the Sedona Hotel Yangon and the Sedona Hotel Mandalay. But other major Singaporean de- velopers have only moved into the market very recently. Oxley Myanmar, for example, a subsidiary of Singapore-listed Oxley Holdings, incorporated earlier this year, and recently announced plans to develop its first project – a 20 storey mixed-use develop- ment in Yangon called Min Residence. As- cott, a division of major Singaporean devel- opment company CapitaLand, made its first foray into the Myanmar market this year, and will manage the serviced apartment units in 68 Residence, a luxury residential project on Kabar Aye Pagoda Road. Soil- Build, another Singaporean firm is responsi- ble for the construction. DP Architects, one of Singapore’s largest architecture firms, has recently upped its game in Myanmar with several high-end development projects in Yangon. These include the Illustra at Pho Sein, the State House Hotel, Junction City, Crystal Tower and Residences, and the Polo Club Residence. Singaporean architects and designers are becoming increasingly popular among Yangon developers. This is partly because many local developers be- lieve buyers are prepared to pay a higher price for a project with a Singaporean con- nection. Capital City, a mixed-use project on a 12.8 acre site, is being designed by RSP Architect, a Singaporean firm. Paragon Res- idence, a high-end residential condomini- um in Ahlone township, and the Kantharyar Consortium Project are both being designed by AGA Architects from Singapore, and ar- chitect Aedas is master-planning the San- chaung Garden Residence project. New Precinct Architect, also from Singapore, is working on the design for River View Point, a residential and retail project being de- veloped by Asia Development Consortium. Singaporeans TJT Consultants and M&E Top Global Engineering are also working on the project. Furthermore, several interna- tional companies are beginning to invest in Myanmar real estate through Singapore-in- corporated firms. Marga Group is one such example – a Singapore-based real estate de- veloper with a focus on Myanmar. The com- pany’s shareholders and directors are from Hong Kong, Korea and the UK. The compa- ny has recently launched its first project, un- der the name of Marga Landmark Develop- ment Company, it will develop a high-profile luxury hotel, retail and office project called Dagon City on 22 acres in the center of the city. Many of these companies are still test- ing the water, and are working in Yangon on a project-by-project basis from offices in Singapore. These are the companies that are likely to build capacity in Myanmar in the coming years. To date, all of these compa- nies have worked to some extent with a local partner. However, a law allowing 100% for- eign ownership of development projects has just been passed. This change in ownership law is likely to transform the market land- scape further, and has opened the way for wholly-owned Singaporean developments to begin in Yangon.
Singapore is not Myanmar’s only neighbour to be cashing in on the high-end develop- ment boom. While Thailand has been slower off the bat in the real estate and development sector, Thai companies too, are beginning to take the Yangon market more seriously. Thai hotel group Dusit, for example, is looking to re-enter Myanmar after years of absence, with several projects in the works – a hotel in Bagan, an upscale residential project in Yangon as well as several resorts across the country. The Yangon project will be a hybrid hotel and serviced apartment development, located near to the downtown area. Thai real estate development firm Buritara, mean- while, recently announced plans to develop a condominium and hotel project in Yangon in conjunction with a Japanese firm in 2015. In terms of projects already underway, Seafco and RHLB, both from Thailand, are working on the Kabaraye Executive Residence proj- ect, the former providing geotechnical ser- vices and the latter as a surveyor. Myanmar firm Myint & Associates has hired two Thai companies to work on its landmark office building, the M&A Tower. KL Design and W and Associates are both involved in the proj- ect and Thai firm DCM Solutions is working on another office tower project, developed by Myanmar company AWBA. Neighbour- ing Vietnam is also just getting started in the Yangon high-end property market, though has done so with one of the country’s largest forthcoming developments. The Hoang Ang Gai Lai (HAGL) mixed-use project, called the‘Myanmar Centre’, is not only one of the largest in Yangon, but is the only project to be 100% foreign owned due to an agreement aimed at increasing bilateral ties between the two countries. Phase 1 of the project is due for completion in 2016 and will include a five-star hotel, shopping centre, offices, serviced apartments and residential towers.
Construction company Hoa Binh has been hired as the main contractor for the mixed- use Capital City project and GK Archi- tecture is working on its debut Myanmar project, the Golden Link Condominium in Bahan township.
Consultancy Archetype Group established a Yangon office at the start of last year, and has since designed several high-rises for de- velopment in Yangon.
More Vietnamese investment is expected in the coming years. The Association of Viet- namese Investors in Myanmar (AVIM) has set its sights on doubling its investment in the country by the end of next year – from $600m today to $1.5bn in 2015.
At the moment, the figure is dominated by the HAGL project, which is worth $440m, though 56 businesses have been licenced to operate in Myanmar.
Slow and steady
Investment from further afield in the South- east Asian region is coming in more slowly.
Indonesian, Malaysian and Philippine com- panies have had less of an involvement in Yangon’s property market than other major powers in the region. Some companies are beginning to show an interest, but they tend to be the larger domestic firms, which have a greater tolerance for risk.
In September, for example, Jakarta-listed contractor Wijaya Karya (Wika) announced it had signed a $125m contract to build a mixed-use development in Yangon for No- ble Twin Dragons, the Singapore-incorpo- rated, Myanmar-owned developer of the project.
Philippine conglomerate Ayala Land also has plans to launch projects in Yangon next year, following the company’s pull-back from China due to a slowdown in the latter’s real estate sector. Initially, Ayala plans to enter into joint ventures to build mixed-use developments, the first of which will be a $30m project, comprising a series of towers.
Malaysian-listed Ho Hup Construction signed a deal last month to develop a high- end villas project through a joint venture with Myanmar conglomerate Zaykabar.
There is every reason to believe, however, that companies from these Asean countries will increasingly see opportunities in the property sector, particularly once the Asean Economic Community is effected in 2015, and the region becomes progressively more integrated.
Clare Hammond is Managing Editor at UK- based Frontier Myanmar Research in Yan- gon See http://realestate.frontiermyanmar.