Savills expands into emerging Myanmar
Savills expands into emerging Myanmar
Savills has just set up operations in Myanmar and the new office will be overseen by the Savills Vietnam management team.
According to Neil MacGregor, managing director of Savills Vietnam, the property market in Myanmar was at an early stage of development, with just some 70,000 square metres of office space available and around 3,200 hotel rooms ready to let.
“In 2013, we have seen office rents rise to $90 per square metre, which is comparable to Hong Kong, Jakarta and Sydney. This is a result of a lack of supply combined with strong demand, driving high rentals,” MacGregor told VIR.
He added that the same situation could be seen in relation to hotel room rates and serviced apartments. “Property is cyclical in nature, and this is particularly true in emerging markets where supply and demand influences can change very quickly. Myanmar may see stronger supply over the medium term, and this will remove some of the heat from the presently constrained market,” he added.
According to a Savills study, Myanmar is characterised by strong property demand and accompanied by high levels of foreign direct investment from the telecommunications, oil and gas sectors. Ultimately this will flow through to gross domestic product growth which will drive the broader economy.
During the past 12 months, Yangon’s property market has delivered outstanding performance. Office rents have risen by 80 per cent, five-star hotel room rates have increased by 70 per cent, serviced apartment rents have grown by 50 per cent, while quality retail rents have risen 10 per cent.
Chris Marriott, CEO of Savills Southeast Asia said that opening an office in Myanmar was another step in Savills’ vision to develop in the ASEAN region as a precursor to the establishment of the new economic community in 2015.
MacGregor said that he had recently travelled to Hong Kong, Korea, Japan and Taiwan to brief investors and developers on the market outlook and opportunities in the Indochina region.
“Myanmar has been a hot topic for discussion. There is no doubt that Myanmar and the Indochina markets will be increasingly active over the years to come,” he said.
According to him, there are around 27 Vietnamese companies registered in Myanmar. Many see a trading and commodity driven future as they combine their existing networks across the broader region. Regional trade initiatives set to come into effect around 2015 are also viewed as enormous opportunities for cross border trade.
Savills has received inquiries from Vietnamese investors considering office, hotel and logistics development in Myanmar. Interested investors include the Bank for Investment and Development of Vietnam, Viettel, PetroVietnam and Hoang Anh Gia Lai.
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