Government guarantees on investments and policies are required before Yangon and the rest of the country can secure the capital needed to develop large-scale megacity projects, real estate experts said.
Although foreign investors have mostly been keen to invest in the attractive Yangon real estate market, they mainly stay away from lucrative megacity development projects due to the lack of government guarantees and irregular policies that create uncertainty, said U Aung Min, director of Myat Min Construction.
Megacities are generally vast metropolitan areas housing large quantities of people. “For Myanmar to develop, we obviously need megacities and foreign direct investments (FDI) to fund them. While many foreign investors want to invest in Myanmar’s promising real estate market, they are first waiting for more stable policies and guarantees against their investments from the government,” he said.
Mr.Runze Yu, head of Hong Kong real estate developer Country Garden Holdings Company, agrees. “Although we are interested in developing megacity projects in Myanmar, we will not invest without government guarantees for such a large investment,” he said.
Unable to take off
It is for this reason that large-scale megacity projects in Myanmar have mostly failed to take off so far. “For megacity developments like the Yangon New City project to be successful, we need large-scale investments and financing vehicles to develop the area as well as developers who can invest in infrastructure,” said U Yan Aung, general manager of Asia Construction.
Proposed under former Yangon chief minister U Myint Swe, the Yangon New City project was reinstated in February by current chief minister U Phyo Min Thein. It is expected to be developed over 4,745 hectares of land between the Hlaing Thar Yar – Twante motorway and Seikkyi Kanaungto Township near Yangon.
Megacities needed
Market watchers and insiders say time is running out for the current government to enact clear and proper investment policies that are favourable to foreign investors. The way Mr Yu of Country Garden Holdings sees it, Myanmar must upgrade the living conditions of its people for the country to continue progressing. And one way of doing so is by redeveloping the slums in major cities like Yangon.
“I came to Yangon last month and visited the slums in Dala Township. Although Dala is no more than ten minutes away from downtown Yangon, the living conditions between the two areas are totally different,” he said.
Even though the Myanmar Investment Commission has approved and prioritised several low-cost housing projects and industrial land investment projects, “the government’s support in providing stable policies and investment guarantees is still needed so that investors can come in with large amounts of capital to develop new megacities,” Mr Yu said.
“After stable political conditions and peace in the area, all we need are the guarantees and policies to back our investments. Otherwise, no investor will risk investing in the country.”
Currently, Country Garden Holding is developing Forest City, the first green city project with four man-made islands in Asia. The project, which includes office towers, parks, hotels, malls and international schools, is being developed in Johor, Malaysia. Once complete, it will house 700,000 people.
The company is now expanding its scope in the region. “The Southeast Asia property market has more potential than many other regions because countries here enjoy political stability and regional peace. Countries like Myanmar just need stable policies to attract large volumes of FDI,” said Mr Yu.
Source: Myanmar Times
