With more foreign direct investments (FDI) expected to flow into Myanmar due to insurance sector developments, enactment of the Investment Law and anticipated approval of the new Company’s Act, real estate developers have been urged to build more international-standard office complexes to accommodate demand.
“There is potential for [office] development. Insurance sector developments and new Investment Law will attract more foreign investors. As such, demand from foreign investors for fairly priced international standard office towers in Yangon will be high,” said Karlo Pobre, associate director Colliers International, which is a real estate consulting firm.
Following the completion of the Junction City office tower at the corner of Bogyoke Aung San Road, the total office area in Yangon has increased by 30 percent to 320,000 square meters (3.44 million square feet), according to a Colliers International report.
That is expected to expand to hit 350,000 sq m after several ongoing office tower projects are completed this year and next. The projects include Pyi Nyein Thu tower in Mayangone township, the Red Hill mixed-use development in Sanchaung township and Crystal Tower and Regent Office Tower in Kamayut township.
Even though construction of international-standard office complexes increases every year, demand for office space by new investors in Myanmar is still on the rise, real estate agents said.
Meanwhile, business owners who use their own homes or rent condominium units as offices have also been switching to office complexes, adding to demand, said Daw Thuzar May from Thitsar Myay real estate agency.
Among the advantages of office towers, which are popular with business owners who want to open company offices, are the stable rents and lower maintenance costs. “The lower general cost is due to inclusion of utility charges like Internet connection and electricity in the total lease. So, those who open offices in their own homes or in rented condos have moved to office towers,” she said.
In addition, many prefer office towers to downtown apartments because it offers more security and quiet, Daw Thuzar May said.
“For one who wants to open a small office, a room in a specific building for offices with all services included is better both in terms of cost and time compared to renting a flat and having to take care of all the services needed. Also, as office complexes make for a more conducive work environment than a unit along the streets, more people are opting to rent units in office towers,” she said.
Currently, the office rental rate in and around Yangon city is $ 40 to $50 per square meter per month, according to Colliers International.
Source: Myanmar Times
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