Singapore’s Surbana International Consultants will have a greater capacity to bid for large scale projects in Myanmar, following its recent merger with Jurong International Holdings, according to Gareth Wong, general manager of Surbana in Myanmar.
Both companies were formerly part of the Singaporean government – Surbana was formerly under the Housing & Development Board (HDB) and Jurong International was part of JTC Corporation, under the Ministry of Trade and Industry. They have since been corporatised and, last month, the two institutions merged to form Surbana Jurong Private Limited, said Mr Wong.
“This will allow us to do a lot more in Myanmar, particularly in the industrial space,” he said. Surbana, which is 60 percent owned by Singaporean sovereign wealth fund Temasek and 40pc by developer CapitaLand, first entered Myanmar in late 2012, when it signed with the Ministry of Construction (MoC) to master plan the 220 acre Ayeyarwun Yadanar low-cost housing project in Yangon’s Dagon Seikkan township.
Low cost housing projects are at the heart of Surbana’s business – under the HDB, it was charged with clearing Singapore’s slums and resettling people into affordable, state-built housing. “We will focus on housing development projects in Myanmar, and leverage on our track record of housing 80pc of Singaporeans across 26 townships, to help with Myanmar’s urgent housing needs,” said Surbana’s CEO Pang Yee Ean, to The Myanmar Times.
Earlier this year, the company signed a memorandum of understanding with the MOC’s Department of Urban and Housing Development (DUHD) to collaborate on urban development projects, including a master plan for the development of affordable housing, said Mr Wong.
“A major challenge is how to give people the means to access low-cost housing,” he said. “In Singapore, 80pc to 90pc of people own their own homes, largely due to the Central Provident Fund (CPF).” The CPF is a social security system that requires Singaporean citizens to set aside funds each month for retirement. The money is also used for housing, insurance, investment, healthcare and education.
“The two main hurdles in Myanmar are the price of developing the projects, and the affordability of the units for the buyers,” said Mr Wong. “Progress will happen through small, incremental steps – it is a question of giving people access. At the moment there is only one way for this to happen – through the Construction and Housing Development Bank (CHDB),” he said.
CHDB was set up in 2013 under MoC supervision, to provide loans to buyers of affordable housing units, but so far its success has been limited. Managing director U Win Zaw told The Myanmar Times earlier this year that the bank needs more funding to expand its loan portfolio.
Another key area of focus for Surbana in Myanmar is infrastructure, engineering and development, said Mr Pang. “We are working on projects in the Yangon, Bago, Mandalay and Ayerwaddy Regions, as well as the state of Rakhine,” he said. “Bago and Mandalay have great potential for further development in the near future. Our i-Land Industrial Park in Bago Division remains one of our largest projects, and has drawn a lot of interest from foreign investors.”
The i-Land Industrial Park is a 160 hectare development in Bago, around 65 kilometers from Yangon and a 45-minute drive from the Hanthawaddy International Airport, which is due for completion in 2020.
In addition, the company is working on several large projects in Mandalay. “Mandalay is Myanmar’s second-largest city, has bountiful resources, and a strategic location next to China. Surbana is currently working on two master plans in the vicinity, and we believe that there will be more interest in the area after the plans are formally announced,” said Mr Pang.
In Yangon, the company is also working on a number of smaller projects, including Yangon Aquarium. Surbana is the design and project management consultant for the 20,000 square metre (215,000 square foot) project which will be built beside Kandawgyi Lake and will include fresh and seawater sea life from around the country.
Surbana is also the project management consultant for Polo Club Residences in Yangon, which is being developed by Golden Glory Group under Lat War Group of Companies and a group of Singaporean investors. It will include high-end condominium units, a five-star hotel and retail space. “Surbana is providing the overall management of the project’s execution from design, procurement, to construction and completion, as well as Front-End Engineering Design (FEED) infrastructure services,” said Mr Pang.
“In February this year, Surbana was also appointed as project manager for a private residence development in Golden Valley,” he said. The project is located immediately behind City Mart’s Marketplace development and comprises 17 semi-detached homes and 24 high-end apartments. Furthermore, Surbana is providing maintenance consultancy services for the Junction Square Shopping Complex in Yangon’s Kamayut township.
According to Mr Pang, over the next five years the construction industry in Myanmar will grow at a faster pace than in other emerging markets. “The industry’s output value recorded an average annual growth rate of 7.4pc from 2010 to 2014, and future projections for the next five years indicate that this growth rate will average at least 6pc year-on-year,” he said.
“This positive outlook is supported by the expanding economy, increased government investment in public infrastructure, and the rising interest of domestic and foreign real estate developers in constructing residential units to meet the population’s housing demand.”
Advisory firm PwC estimates that infrastructure spending in Asia is projected to grow from $4 trillion per year in 2012 to more than $9 trillion per year by 2025, said Wong Heang Fine, group CEO of Surbana Jurong. “[PwC] estimates that the Asia-Pacific market will represent nearly 60% of global infrastructure spending by 2025. With mergers and acquisitions, Surbana Jurong will be better placed to secure many of these jobs moving forward,” he said.
Source: Myanmar Times
