Myanmar Property Market beat vol 6 feb 24 - feb 28 - 2014

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Information about Myanmar Property Market beat vol 6 feb 24 - feb 28 - 2014
News & Politics

Published on March 10, 2014

Author: Myanmar-Property



News digest of property related news in Myanmar

February 24 – 28 | 2014 INVESTMENT Thilawa SEZ Share Sales, Land Leases Set For April Source: Myanmar Times Two million shares of the Myanmar Thilawa Special Economic Zone Holdings Public Ltd will help to raise the necessary funds to begin build the first phase of the project, while additional funds will be picked up through the issuance of early leasing contracts. “We  are  going  to  work  with  the  minimum  amount  of  initial  capital  possible,  that  is,  the  proceeds  of  2.14  million  shares   valued  at  more  than  $21  million,”  said  UMFCCI  and  Myanmar  Thilawa  SEZ  Holdings  chair  U  W in  Aung,  adding  that  more   shares may be issued in the future to cover costs if needed. “Our  aim  is  to  reinvest  the  money  into  development,”  he  said. With regards to property leasing, he would not state what land in the SEZ would cost though U Win Aung reassured that “the  price  would  be  much  cheaper  than  in  other  local  industrial  zones”,  adding  that  his  firm  has  already  received  several   letters of intent from companies in the garment, food processing and manufacturing sectors. According to the current SEZ law, lease agreements can be signed for up to 70 years. The 2,400-hectare zone, which broke ground in November, is about 25 kilometers south of Yangon along the Yangon River in Thanlyin and Kyauktan townships. The zone is being developed by a Japanese consortium as a 39pc shareholder with participation from Mitsubishi, Marubeni and Sumitomo corporations, and locally run Myanmar Thilawa SEZ Holdings (MTSH), who have 41pc of the shares. An additional 10pc of the project belongs to the Thilawa SEZ management committee, while the remaining shares belong to the Japan International Cooperation Agency (JICA). Japan will provide ¥20 million (US$3.28 billion) for the related infrastructure, electrical systems, ports and transportation. Economist U Hla Maung said that because the standing investment offer only pertains to construction, as opposed to manufacturing products for retail, it would be difficult to predict potential yields as some potential investors may consider spending elsewhere. “Myanmar  investors  in  local  public  companies  don’t  receive  much  in  dividends  even  now,”  he  said. C.I.M Property Consultants Co., Ltd.

Singapore Tops List Of Foreign Investors In Myanmar Source: Eleven Media Singaporean companies have been expanding their investments in Myanmar sectors such as energy, construction, hotels and tourism, agriculture and the industrial sector, making it the largest foreign investor in the country, according to the Directorate of Investment and Company Administration (DICA). DICA‘s  statistics  for  last  month  show  that  overall  foreign  investment  reached  more  than  US$  1  billion  with  Singapore  as   the top investor, followed by Hong Kong, South Korea and Japan. Those countries invested most in the garment, manufacturing and beverage distribution sectors, as well as communication. The Myanmar Investment Commission allowed a total of 13 foreign investments last month. Of those, three companies are from Singapore and Hong Kong, two from South Korea and Japan and the rest from China, Thailand and the United Kingdom. Most foreign investment is in the energy sector, which accounts for 42.5 percent of all foreign investment. Meanwhile, in the hotel and tourism industries of Myanmar, 14 Singaporean hotel companies have invested US$ 880.4 million, followed by 10 Thai companies at US$ 235.7 million, six Japanese companies at US$ 183 million, and four Hong Kong companies at US$ 150 million. As well, two Malaysian companies invested US$ 20 million and one Vietnamese company US$ 440 million, one British company US$ 3.4 million, and one United Arab Emirates company US$ 4 million, according to the Ministry of Hotel and Tourism. The ministry gave the green light to 39 foreign investors to work in Myanmar‘s  hotel  and  tourism  sector  last  year.  Those   companies invested US$ 1.9 billion in 2013, said a ministry official. RESIDENTIAL Real Estate & Property Gov't Urged To Control Soaring Housing Prices Source: Eleven Myanmar The government must build more low-cost housing to stabilize the soaring price of real estate, according to a real estate association. Khin Maung Than from the Myanmar Real Estates Service Association said in a meeting on Monday that if the government must build more and cannot control the price of housing by imposing more tax. "The  soaring  price  of  real  estate  can‘t  be  controlled  right  now.  Now  they  are  controlling  the  prices  with  tax.  If  the  prices   are still high, we can control them with ownership. If the  property  owners  don't  change  the  ownership‘s  name  within  the   specific   time,   they   will   be   paid   a   fine.   If   we   control   it   with   laws,   they   can‘t   obey   them,"   said   Khin   Maung   Than.   The   government is currently building the Yadanar and Ayeyarwon affordable housing project which they aim to finish by 2015. The market price of the apartment is over Ks 20 million. Apartments from Shwe Lin Ban and Kyan Sit Min low-cost housings in Hlaing Tharyar Township are expected to sell soon and the apartment is worth of around K 12 million, sources say. Bomu Ba Htoo affordable housing in North Dagon Township is being sold through an instalment system and selling prices range between Ks 23.7 million and Ks 32.9 million, sources say. The public criticized the soaring prices of housing making it very difficult for lower income families to own a home. C.I.M Property Consultants Co., Ltd.

HOTEL & TOURISM Construction Halts On Old Bagan Hotel By Nyan Lin Aung The government has ordered the owners of a hotel in Old Bagan to halt the unapproved construction of a planned annex, authorities said. U  Naing  Win,  director  of  the  Ministry  of  Culture’s  department  of  archaeology, said that the Aye Yar River View Resort Hotel started building the annex before receiving planning permission for the local authorities.  “We   have  ordered  the  hotel  to  cease  construction.  If  they  continue,  we  will  take  legal  action,”  he  said. The hotel did not respond to a request from The Myanmar Times for comment. The Mandalay City Development Committee (MCDC) said the matter was being handled at the regional level. The Ministry of Culture issues permits for new construction in the Bagan historic zone only after a review determining whether it would infringe on any of the historic structures  in  the  area.  “If  we  can  approve  proposals  we  do,  and  if  we  cannot,  we  don’t,  but  the  Aye  Yar  hotel  started   building  before  any  permit  was  issued,  so  we  had  to  stop  it,”  said  U  Naing  Win. Myanmar Planning Six More International Airports Source: Myanmar Update News Myanmar is planning six international airports in southernmost and northern corners of the country, according to the local newspaper Messenger report. The Civil Aviation Directorate said it would upgrade three airports each in the corners to the international airport. The government agency will tap support of Japanese International Cooperation Agency to upgrade the airports. An official from the directorate predicted the increased incoming number of tourists as the country develops gradually. Myitkyina, Putao and Bhamo airports in the northernmost part of Myanmar and Myeik, Kawthoung and Dawei airports will become international airports in the future, according to the report. Myanmar currently has three international airports in Yangon, Mandalay and Nay Pyi Taw. Restoration Work Starts at Mandalay Monastery Source : The Myanmar Times Foreign experts and historians from the Ministry of Culture are working together to restore the historic Shwenandaw Monastery. Known colloquially as Shwe Kyaung Gyi, it is one of the last surviving buildings from Mandalay Palace and the Myanmar monarchy. Funding  for  the  operation,  which  began  this  month,  comes  from  the  United  States  Ambassador’s  Fund  for  the  Cultural   Preservation  Project  (AFCP).  “We  have  [provided]  US$500,000  for  restoration  works  to  preserve  the  original  structure  of   Shwe  Kyaung  Gyi,”  US ambassador Derek Mitchell said on February 14 at a ceremony to launch the project. He said the work would take around two years to complete. “This   is   an   historic   collaboration   between   the   United   States   and   Myanmar,”   said   Jeef Aleen, director of the World Heritage Fund. The project was announced in July when U Than Swe, the deputy minister for culture, and Mr Mitchell met experts and historians at Mandalay National Theatre and visited the monastery. According to historical records, King Thibaw moved Shwe Kyaung Gyi outside Mandalay Palace in 1883, saving it from the destruction that befell the rest of the palace during World War II. Its structure differs from that of other traditional monasteries and featured 150 major wooden pillars, 54 decorative carved wooden pillars and five brick staircases. C.I.M Property Consultants Co., Ltd.

Government To Increase Number Of Hotel Licenses Source: Thura Swiss The supply of hotel rooms in Yangon will approximately double in the coming years, said a regional government minister. At the moment, Yangon city has 190 licensed hotels offering a bit more than 9,000 rooms. However, the number of licensed hotels will increase to 250 corresponding to more than 20,000 rooms, said U Soe Min, Yangon Region Minister for Hotels and Tourism. The development of hotels in Myanmar is crucial as the current demand for rooms outmatches the supply, resulting in high room prices. In addition, the demand for rooms will not soon decrease as the country is opening up and Myanmar as the chairman of ASEAN will host a series of international meetings in 2014. The development of the tourism sector should help to raise GDP and will benefit local business-men as many of them have opened or are going to open hotels especially to target officials coming for ASEAN meetings in 2014. RETAIL Myanmar Real Estate: High Property Prices Make It Difficult For Convenience Stores To Be 'Convenient' Source: Ibtimes Sophie Song The high real estate prices in Yangon, the commercial center of Myanmar, have made it harder for many foreign businesses to enter the Burmese market, yet it may be domestic entrepreneurs – like convenience store owners - who are more severely punished by the skyrocketing prices.The convenience store sector in Myanmar has been in existence for only two years, after the civilian government took control of the Southeast Asian nation. The stores are concentrated in Yangon commercial areas such as Kyauktada, Latha and Pabedan, the Irrawaddy reported Wednesday. The three biggest domestic convenience store operators in Yangon -- Myanmar Indo Best (which has 50 outlets), City Mart (with about 30 outlets) and Capital Hypermart -- have found it difficult to sustain their businesses, which are usually in  densely  populated  areas  with  a  lot  of  foot  traffic,  in  the  face  of  escalating  real  estate  prices.    “It’s   still hard to look for better locations in crowded areas, because we need to open on ground floors, so rent prices are too expensive downtown,”  said  W in  W in  Tint,  according  to  the  Irrawaddy.  “That’s  why  it  has  become  a  major  issue  for  us  to  open  more.” . Rents for a 1,200-square-foot ground-floor property in Kyauktada can cost 3 to 5 million kyats a month, according to a local real estate agent. With annual rent totaling upward of $60,000, it is no wonder that City Express stores have yet to make a profit.An added pressure for these domestic chains is the possibility that many foreign convenience store operators, like 7-Eleven, may be looking to enter the Burmese market, the Irrawaddy reported. “I  can  say  that  convenience   stores will be a successful retail format in the future, so we need to prepare for foreign investment in this business  now,”   Win Win Tint said. GENERAL PROPERTY Tatmadaw Not Responsible For Administering Returned Land: MP Source: Soe Than Lin Published in Myanmar The Tatmadaw is not responsible for administering the return of seized land to its original owners, says a military appointee to the Pyithu Hluttaw. Lieutenant-Colonel Saw Shwe, who is also a member of the governments' Farmland Investigation Commission, said it was the responsibility of the Ministry of Home Affairs to oversee the return of seized lands to private owners, especially in cases involving litigation against the government. C.I.M Property Consultants Co., Ltd.

"When the land was first seized, it was done on the order of the home ministry," Lt-Col Saw Shwe told Mizzima on February 20. "[The Tatmadaw] has returned land to the Ministry of Home Affairs according to the rules and regulations ... so whether the land is returned to its original owner is now the responsibility of the  ministry,”  he  said. His comments follow a report submitted to parliament this week by the Farmland Investigation Commission which urged the government to quickly resolve land grab cases in which it faced legal action from the original owners. "The performance of the home affairs ministry and all levels of administrative institutions is very weak," Lt-Col Saw Shwe said. "They should be able to say transparently where, when and to whom the seized land was returned," he said. Lt-Col Saw Shwe added that cases in which land had been seized by the Ministry of Agriculture and Irrigation, Ministry of Construction or  township  municipal  committees  should  be  settled  quickly  “to  resolve  current  tensions”. Colliers International | Accelerating success. | Unit 7/C (6th Floor), White Cloud Condominium (Right Entrance), No. (138/142) Thein Phyu Road, Botahtaung Township | Yangon | Myanmar. Theint Theint Twin (Yati) Senior Assistant Mobile +95 (0) 95026722 Theint.Twin Karlo Pobre Manager Research Mobile +95 (0) 931336099 Karlo.Pobre Antony Picon Managing Director Main +95 (0) 9421034026 Likes us on Facebook: Colliers International Myanmar Follow us on Twitter: @ColliersMyanmar This document has been prepared by Colliers International for general information only. Colliers International does not guarantee warrant or represent that the information contained in this document is correct. Any interested party should undertake their own enquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damage arising directly or indirectly there-from. C.I.M Property Consultants Co., Ltd.

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