YANGON — Singapore-listed Yoma Strategic Holdings is accelerating its real estate development drive in Myanmar to meet growing local demand for residential units, offices and commercial facilities.
Yoma’s move comes as Myanmar has emerged from decades of international isolation and now enjoys high economic growth, making the Southeast Asian country an increasingly promising property market.
Yoma has recently launched the Lotus Hill upscale residential area development project in Yangon, Myanmar’s largest city, as it aims to cash in on a sharp rise in the number of middle-class locals and expatriates.
The company, together with Japan’s Mitsubishi Estate and other partners, also plans to embark on a major project in the former capital of Myanmar later this year.
Cyrus Pun, Yoma’s executive director and head of real estate, unveiled the company’s future business strategy in an interview with The Nikkei.
Thinking big
The Lotus Hill project involves the construction of about 70 luxury houses on a site of some 3.6 hectares along the Yangon River, in western Yangon. The houses will have three stories and floor spaces of between 190 sq. meters and 370 sq. meters. They are expected to be sold at prices ranging from $600,000 to $800,000.
Yoma started subscription sales of the houses on June 25, although it is still unclear when the project will be completed.
The company also operates facilities such as a golf course, hospital and school near Lotus Hill. The Lotus Hill houses “will be the best for young families who want to live a modern and affluent city life,” Cyrus Pun said.
Yoma has also been engaged in the Star City upscale residential area development project on a site of some 50 hectares in the eastern Yangon district of Thanlyin since 2010.
Speculative transactions are rampant in the Myanmar property market amid the inflow of surplus funds there. But Cyrus Pun said Yoma is developing the residential areas for those who actually live there, not for speculators.
Yoma is also preparing to launch the Landmark Development project on about 4 hectares of idle land near Yangon Central Railway Station in partnership with Mitsubishi Estate and major Japanese general trading house Mitsubishi Corp. The project made significant progress at the end of 2015, when Yoma was granted the extension of a land leasing contract by the then-Myanmar railway ministry, which is now the transport and communications ministry.
Cyrus Pun said the Landmark Development project will involve the construction of a new Peninsula hotel and two office buildings. Construction work on the project will kick off by the end of this year, and the first phase will be completed within four years, Cyrus Pun said.
Yoma has yet to release details about the Landmark Development project, but it is estimated to cost $400 million. The Asian Development Bank, a Manila-based regional development organization, is also expected to be involved.
New landscape
Cyrus Pun is the son of Serge Pun, chairman of Serge Pun & Associates (Myanmar), a major conglomerate in Myanmar. Yoma is a core company of the SPA group. Serge is a Myanmar national of Chinese descent.
Cyrus Pun, executive director and head of real estate at Yoma Strategic Holdings
Yoma has seen its sales and net profit grow steadily in recent years. In the financial year ended on March 31, 2016, sales totaled about $112 million Singapore dollars ($82.6 million), while net profit came to about S$44 million. The property business accounted for 60% of sales.
Among SPA group companies is First Myanmar Investment, a real estate developer listed on the Yangon Stock Exchange.
Myanmar embraced democracy in 2011 after decades of military rule, prompting many foreign companies to set up operations in the country. This has resulted in sharp growth in property demand and rents for offices and residential units.
Under such circumstances, Yoma and other property developers — both domestic and foreign — have been on a spending spree in the country.
Hoang Anh Gia Lai, a Vietnamese property developer, partially opened Myanmar Plaza, the largest complex in Yangon, in December 2015. China’s Toener Group also started selling lots in the massive 13-building Riverfront Garden complex in Yangon this month.
Myanmar Plaza and Riverfront Garden both comprise office buildings, residential buildings and commercial facilities. They have gained in popularity among middle-class and wealthy people.
Meanwhile, competition is intensifying in the local real estate market as new properties continue to be supplied in large quantities.
After continuing to rise since the start of democratization, the number of new high-end condominium units supplied in Myanmar declined for the first time in four years in 2015, according to Colliers International Group, a U.S.-based global real estate services company.
The supply of new office buildings is expected to keep rising in 2016 and beyond even though office rents have been on a downward trend since the second half of 2015.
Source: Asian Nikkei Review
