After a decade of relatively flat or no-growth Myanmar’s construction and real estate sector is expected to attract significant investment. Currently, almost all of Myanmar’s top quality hotels, offices, serviced apartments and retail malls are operating at full capacity.
The residential real estate market offers opportunities to developers in different project and pricing categories. The opening up of the economy and the anticipated growth of a middle class is expected to drive the market. Greater urbanization is expected to lead to an increase in land prices which will is in-turn likely to lead to the construction of high end condominiums. The design and quality of many of Myanmar’s existing condominium stock remains poor compared to neighboring countries. The law in this area requires updating. Foreign ownership is currently not permitted. Growth in the sector could also be affected by a lack of investment in surrounding infrastructure.
Myanmar suffers from an acute under supply of office space and commercial real estate. Between 1997 and 2010 no new commercial real estate projects were completed in Yangon where most office units date to the time of colonial rule. As a consequence rents have risen rapidly. One of the key challenges facing Myanmar as it opens up to investment will be to provide additional office space while at the same time developing transport and communications infrastructure. The Government has announced plans to create another Central Business District at the edge of the Inner City close to the Yangon International Airport.
Myanmar’s retail sector is also under-developed. Despite recently completed developments such as Junction Centre Maw Tin opened in Lanmadaw township together with other new shopping malls open across Yangon, including Capital Hypermart (Thaketa), Junction Zawana (Thingangyun), Diamond City (Hlaing Tharyar), East Point (Pazundaung) most of Yangon’s shopping centers are poorly designed and do not conform to international standards.
According to the government 300,000 tourists visited Myanmar in 2010. This number rose to approximately 390,000 in 2011. Neighboring Thailand draws in excess of 15 million tourists annually. With 2,823 km of coastline and a myriad of cultural attractions Myanmar boasts tremendous potential as a leading holiday destination in South East Asia. To fulfill its potential foreign investment and technical support is needed in new infrastructure particularly hotel construction and improvement.
At Legal Steps team we are experienced in advising on residential, commercial and retail real estate issue. We are further experienced in advising on foreign investment in the real estate sector.