Colliers Property Report – Myanmar Retail Quarterly Q4 2018

E-commerce and experiential retail growth potential promising

Summary & Recommendations

Myanmar can be considered a latecomer to the e-commerce wave, having experienced international isolation until 2011. While the country’s e-commerce future looks favourable, a huge amount of work from the government remains, particularly in improving the legislative framework, information and communications technology, and payment infrastructures. In the meantime, given the strong development pipeline for 2019, along with the shift in consumer preferences towards modern retail developments, Colliers encourages both developers and retailers to rethink their projects and start differentiating their offerings with more emphasis on experience and convenience. Prospects for large-scale shopping malls and lifestyleoriented centres remains strong.


Demand for retail space should remain robust at least in the next two years led by strong store expansions. We urge developers to construct quality retail centres to cater to the growing presence of foreign franchises.


Yangon’s aggregate supply stock exceeded the 400,000 sq m mark. By 2019, we expect to witness the highest annual addition of leasable space thus far.


Occupancy declined by 2% qoq to 90% given the considerable new supply. We project a temporary decline in rates given the sizeable supply scheduled in the next six months.


Colliers expects rental rates to gradually increase in the next two to three years, on the back of strong demand coupled with consumers’ improving spending capacity.


As at the end of 2018, Yangon’s aggregate retail stock breached the 400,000 sq meter mark, up by 17% qoq and 24% yoy. This rise in supply was prompted by the completion of three new projects. Two of which are shopping malls (Kantharyar Shopping Mall by Asia Myanmar Shining Star Investment Co., Ltd., and Phase 1 of The Central Boulevard by Marga Landmark); while the other is an integrated retail component (Space @ Yankin by Crown Roofing Co. Ltd.). Together, these projects represent an additional leasable space of almost 58,000 sq meters (624,000 sq feet).

Looking closely, reinforced by these recent debuts, the Inner City Zone continued to dominate the total existing stock. We forecast that new retail centres will be more strongly evident in the area going forward on the back of strengthening commercial development, supported by the availability of developable land.

Source: Colliers International

Generally, we have observed that developers are now gaining much more confidence amid robust demand from both local and foreign tenants alike. The shift in consumer preferences towards modern retail developments, accompanied by the recent easing of trading restrictions in the country, is creating an impetus for expansion, with the supply now geared for escalation in the coming years.

Source: Colliers International

In 2019, Yangon is projected to witness an addition of almost 150,700 sq meters ( 1.6 million sq feet) of leasable area – the highest annual addition recorded to date. Notable developments such as the second segment of The Central Boulevard (Phase 1) by Marga Landmark, Fortune Plaza (Phase 1) by Excellent Fortune Development Group, Yadanar Mall (Time City) by Crown Advanced Construction Co., Ltd., The One Shopping Mall by Creation (Myanmar) Group of Co., Ltd., and Secretariat Retail by Anawmar Art Group are all planned to come online in 2019. In a stark contrast, additional stock in each of 2020 and 2021 is meagre. As such, we advise developers to take advantage of this opportunity. Potential for large-scale shopping malls remain significant. Lifestyle-oriented projects offering leisure and recreational activities should remain strong draws for families and among the growing young population. We also advise tenants to move quickly to secure space considering the dearth of new supply coming online beyond 2019.


Myanmar ranked 123rd out of 144 economies in the United Nation’s 2017 B2C E-commerce Index, which measures the readiness of countries to engage in online commerce, using four indicators: internet use penetration, secure servers per one million inhabitants, credit card penetration, and a postal reliability score. Myanmar ranked also 135th (up from 140th in 2016) out of 175 economies in the 2017 International Telecommunications Union ICT Development Index (IDI).

The relatively low position of Myanmar in these rankings hides the fact that the country has made steady progress in harnessing the potential derived from the adoption of e-commerce over the recent years. As noted by United Nations Conference on Trade and Development (UNCTAD), the nascent e-commerce sector could be key to driving the country’s retail industry in the coming years. In fact, one of the biggest contributors to the country’s internet economy is retail e-commerce. The improvement in internet infrastructures and proliferation of digital mediums have strongly expanded its influence to businesses, especially small to medium-scale enterprises. While the role of malls and physical stores remain crucial, the number of buyers resorting to online purchases have noticeably grown over the recent years.

For instance,, the Myanmar arm of China’s largest e-commerce company Alibaba Group, reportedly generated sales of over US$90,000 (MMK143 million) in the first hour of its “Singles’ Day” online sale last November 11. Shop, which is the largest online shopping platform in the country, received nearly 1,500 orders in the first hour of the day, with most of which placed via mobile phones. Over 200,000 shoppers accessed its website and mobile application on the day after discounts were made to more than 50,000 items across all its 12 product categories such as fashion and accessories, electronic devices, home appliances, and cosmetics.

This strong response to Shop’s online sale underscores the rising demand and potential for e-commerce. At present, the e-commerce market is only 0.01% of Myanmar’s GDP, amounting to USD6 million. According to the Ministry of Commerce (MIC), if this number improves to just 0.1%, the market would be worth USD68 million. As expressed by the Myanmar Retailers Association (MRA), e-commerce is expected to develop fast over the next five years, however, only when legislation governing the industry is targeted to come into force.

Unlike the United States in particular where brick-and-mortar retail malls have closed shops due to the fierce competition brought about by online retail businesses, malls remain an important part of the Myanmar lifestyle and continue to attract consumer traffic. To attract more customers, we continue to encourage malls to provide more lifestyle amenities and technology-driven customer experiences that generate a sense of destination. Developers and retailers in the country tend not to migrate totally to e-commerce but in fact use online shopping and social media platforms, especially Facebook, to complement their physical stores. We believe that this is a thriving opportunity that mall operators and retailers should tap.

Improvements in online security support retail penetration

Despite the growing acceptance of online shopping in the country, only 1% of payments are made by credit card; while a mere 2% have mobile accounts according to 2018 World Bank Global Financial Index. We believe that the opportunity lies in the growing popularity of debit cards and mobile wallets, with close to 15% of locals already using debit cards to make purchases. We encourage operators and retailers to ramp up the security features of their online sites. If they do so, customers wary of hacking will likely be encouraged to use their credit cards, debit cards, and mobile wallets more frequently for online transactions.

With such robust growth and clear demand to go digital, Myanmar is attracting the attention of business accelerators and venture capitalists, fuelling the booming tech start-up industry. In the long run, more investors and incubators will be needed, complementing assistance from the government and banks to create the ecosystem needed for e-commerce to take off in Myanmar.


Given the significant new supply, the citywide occupancy rate reached the 90% level at the end of Q4 2018, down by 2% and 6% on a quarterly and annual basis, respectively. We expect this trend to persist in the succeeding year given the highest annual addition of supply anticipated to come online. Nonetheless, the continuous entry and aggressive expansion of foreign brands should help buoy the overall take-up rate for the succeeding year.

Source: Colliers International

Meanwhile, for the past two quarters, average rental rates have trended downwards. As of Q4 2018, citywide rents stood at USD31.4 psm per month, a decline of 2% qoq and 3% yoy. We expect the further introduction of higher quality projects to support premium rents in the next twelve months. However, we forecast rental increases to moderate in the next two to three years as competition among landlords may start to increase.

Source: Colliers International

Looking ahead, as more international quality supply comes online, Colliers advises developers to target new and innovative concepts to the market. Apart from introducing destination retail developments, developers should also integrate a diverse tenant mix with a focus on entertainment facilities. In essence, developers and retailers must constantly earn shopper patronage anew. This challenge is more profound than simply competing with e-commerce. Rather, they must rethink how they engage shoppers with more interesting, compelling experiences that leverage the inherent benefits of physical stores over the virtual world of online shopping. As we view it, it is no longer a focus on sales per square foot but experience per square foot.

For more information, please contact:

Deputy Managing Director| Myanmar
+95 (0) 979 573 3378

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