Colliers Property Report – Service Apartment Q1 2019


Summary & Recommendations

Owing to the construction delays witnessed in majority of projects across the city, no new serviced apartments were introduced as of Q1 2019. In turn, the average occupancy almost reached 80%. Meanwhile, rental rates across all unit categories have remained generally stable QOQ.
Given that competition is set to intensify in the coming years, both developers and operators are advised to remain strategic with their plans. For older establishments, we continually recommend the modernisation of communal facilities and in-room amenities in order to successfully compete with newer developments. As for future investors, we recommend reaping the unrealised benefits and opportunities available in the underserved limited or midmarket.


We expect demand to remain robust all throughout 2019. However, preference for mid-tier but modern projects will become more pronounced at least in the immediate future.


No new completions were observed as of Q1 2019 due to construction delays. Nonetheless, Colliers still expects the total supply to double in the next 3 to 4 years.


The citywide occupancy rate almost reached the 80% mark due to limited entry of supply. We expect occupancy levels to become stronger across lowertier but modern quality projects.


Rents for one and two-bedroom units witnessed a marginal decline QOQ. Colliers expects further correction across all unit types in the next three years as competition heightens.


Serviced apartments are products in the lodging industry that have gained historic progress over the last decade. The prominence of such concept has, in fact, reached a level wherein it has posed a strong competition to conventional hotels in several markets around the globe. Regionally, this segment has grown to wavering degrees from relatively modest origins as a small single market for expatriates and corporate housing using residential properties, to a fully-matured, multi-segmented market attracting both long-stay visitors and an increasing proportion of short-stay guests.

Unlike the developed markets in the region, Yangon’s serviced apartment scene remains at a nascent stage. However, it is slowly catching up as evidenced by the number of developments that has sprung up in the city over the past years, as well as the number of investors that have expressed their intents of entering the market. In fact, as of Q1 2019, the total supply has been unchanged at more than 2,250 rooms. Completion dates of some developments were pushed further back to a later period, leaving Kantharyar Serviced Residences by Asia Myanmar Consortium Development Co., Ltd. and the extension of Clover Suite Royal Lake by Clover Group the latest completed projects. Correspondingly, the cited delays have similarly impacted our supply forecast for 2019. In contrast to our estimations from the same period last year, the projected additional rooms for the year went down from 900, a decline of 66%. We expect the completion of three projects namely Somerset @ 68 Residences by United GP Co., Ltd., The Mona Lisa Residence by A1 Construction Co., Ltd., and The Gonyi Towers by Sae Paing Development Company. Collectively, these projects only account for an addition of more than 300 rooms. Upon the completion of these developments, we expect a limited entry of supply in the next six months. By then, Yangon will only witness a supply surge until the completion of The Loi by Loi Seng Kham Co., Ltd. and Golden City Serviced Apartments by Golden Land Real Estate Development Co., & Nature Link Co., Ltd. in Q2 2020, however construction progress is seen to remain problematic.

Moving ahead, Colliers expects the aggregate stock to double in 2021 (See Figure 1). However, most of these upcoming projects have shown modest signs of progress and some are likely to be shelved. In the meantime, developers and operators of outdated developments should start upgrading in-room amenities with emphasis on design efficiency and modern functionality. Refurbishments on building exterior and communal areas will similarly help reinforce the value and marketability of these properties. It is also during this period that investors may want to consider venturing the unrealised demand opportunities present in the limited or mid-tier market. However, it is crucial for future investors to conduct proper due diligence of the market to effectively acquire a sizeable stake in the city’s developing serviced apartment landscape.


Across the city, the average occupancy rate almost reached the 80% level. The 2% QOQ increase is prompted by the limited entry of new supply, coupled by the sustained positive performance of few developments such as Northern Inya Serviced Apartment, Lotte Serviced Apartment, Sakura Residence, and Kokkine Residence. Meanwhile, rental rates have become more competitive having corrected downwards over the past years. Based on our revised calculations from the last quarter, meagre decreases on both one-bedroom and two-bedroom units were witnessed despite dearth of new supply (See Table 1).

Going forward, we see overall occupancy rates rising modestly in Q4 2019 given the volume of projects coming online. However, it is expected to decline once new supply comes online in H1 2020.

As for the rental rates, although some upscale developments have witnessed limited price movements, the anticipated rise in competition should exert further downward pressure on rental levels across all unit configurations at least in the next 6 to 9 months.

Given the heightened competition in the coming years, prospective developers are advised to take particular interest in understanding the dynamics of the market. As such, Colliers has listed a number of factors that should be critically considered by investors :


At present, key segments for this market are the business travelers and high-level expatriates. Establishments located near to corporate offices, business parks as well as major roads and transport services have key selling advantages.

Level of Services

There are those that provide a full range of services such as daily housekeeping, laundry and room service orders, whilst others provide a limited type of services. We expect limited serviced apartments that provide fewer facilities but are still considered adequate accommodation to gain more traction amongst expatriates.

Development Quality

Another consideration is the construction and service quality. The quality of the structure, finishing, design and space offerings and even the credibility of the brand, operator, and project management are now considered in the selection of serviced residences. It is highly advisable for developers to think ahead even prior to the turnover.

Demand Base

Several foreign companies are setting a foothold in the city, bringing in a sizeable number of expatriates, mostly in top level positions. Investors must consider understanding the needs of this segment. Specifically, with relocation and mobility remaining key strategic initiatives with MNCs, demand for expatriate and corporate housing is expected to grow.

Rental Rates

The price positioning should similarly be considered competitive and should penetrate the market by introducing relatively lower rates. This can be achieved by aiming on the untapped one and two-bedroom markets offering reasonable rental rates, complemented with basic but highly efficient services and functional facilities.

For more information, please contact:

Deputy Managing Director| Myanmar
+95 (0) 979 573 3378
[email protected]

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