Colliers Myanmar Mandalay Property Market Review 2018 and Outlook 2019

Summary & Recommendations

Mandalay City continues to be a promising investment destination with big-ticket infrastructure and property projects being set in place. Township developments such as the Mandalay Resort City (NMRC), and Ye Dagun Taung mixed-use development, among others, are just some of these projects that will continually shape the city’s growing property landscape. Also, linked between Kyaukpyu of Rakhine State and Ruili of Yunnan Province, Mandalay is a major trading hub, pivotal to industrial growth in upper Myanmar going forward. Additionally, the recent easing of visa policy followed by the rise in flight routes from China, should sate demand in the hotel sector for both leisure and business travelers alike. In the meantime, Colliers recommends for investors to consider exploring business on industrial activities, while residential developments must be geared towards competitively priced low-rise apartments or landed residential communities.


The demand for landed residences and low-rise condominiums are preferred as high-rise residential living remains at a nascent stage. However, the success of Garden City in 2017 drove many developers to follow suit. Successful condominium projects designed with two and three-bedroom units, of sizes ranging between 60 and 100 sq meters, appear to be popular formats. Colliers views this growing demand of low and mid-rise buildings as a significant shift in the burgeoning condominium market. In the meantime, our revised database reveals that Mandalay City witnessed over 1,000 units launched in 2017, exceeding the number marked the year before by 158%. The additional supply was mainly driven by Hnin Si Condo of NTL Construction Group, Garden City, MICT Condominiums, Satetara Mahi Estate and Mandalay Commercial Complex by New Star Light and C.A.D Construction Co., Ltd. No new projects were introduced in 2018 as developers focus on their remaining inventories. For the first time since 2004 when condominiums were first introduced in Mandalay, the existing number of units in the Inner City Zone reached more than 400, surpassing that in Downtown.

At present, Colliers observes that the market is almost fully represented by two and three-bedroom units. The average household size in Mandalay being larger than the national average, as well as the prevailing preference over landed residences with multiple bedrooms, are perhaps attributed to the resulting unit configuration. As Garden City debuted in 2017 with more than 600 units, the total supply almost doubled and the selling prices continued to correct further downward. At the end of 2018, the average selling price was at USD 1,023 per sq meter and the cumulative take-up rate stood at 74%.

According to Myanmar’s Urbanization report by World Bank, 12% of all internal migrants across Myanmar, not least those from nearby districts such as Myingyan, Pakokku and Meiktila, moved to Mandalay, the second largest destination after Yangon due to better economic opportunities. As a result, Mandalay’s population of 1.2 million is expected to increase by 4% every year and the demand for quality housing will continue to rise moving forward.

The abundance of developable land in Mandalay allows many developers to continue building condominiums with bigger unit configurations. Despite that, the absence of competitively priced quality buildings especially smaller configurations has left the mid-market segment relatively untapped in Mandalay. Given the development strategy drafted by the Ministry of Construction which envisions hotel and industrial zones to be concentrated in Southern and South-Western ends of the city, the housing requirement for the inhabiting labor force is expected to increase even further. Coupled with the already existing Mandalay International Airport and the highway infrastructure linking Nay Pyi Taw and Yangon, future residential and commercial developments are likely to proliferate in the southern part of the city. Going forward, Colliers sees more demand for newly planned residential and business districts involving low and mid-rise buildings. In particular we recommend developments to adopt outdoor amenities, pedestrian promenades and natural green spaces. To entice buyers, the value proposition should be geared towards integrating quality facilities alongside retail components, a concept yet to materialize in Mandalay.


In 2017, China proposed building a railway linking Yunnan and Mandalay as a part of the China-Myanmar Economic Corridor program, a large-scale infrastructural plan under the broader Belt and Road Initiative (BRI). The construction of Yunnan section on China side has already started and Colliers notes that a feasibility study for the Muse-Mandalay segment has been submitted to Myanmar Railways and Ministry of Transport and Communications. Once implemented, the railroad will be crucial in improving the regional connectivity as well as bringing tourism and retail receipts to Mandalay. In the long run, Mandalay’s retail sector has a lot to gain from being one of the major commercial hubs along the railroad with improved trade, more efficient logistics and growing industrial activities.

According to Ministry of Planning and Finance, Mandalay’s gross domestic product (GDP) is anticipated to increase by about 13% in 2019. The sustained GDP upturn is likely to fuel growth across the full range of retail categories and consumer products in Mandalay. As of 2018, the city witnessed 12,000 sq meter of additional retail space to the total supply with almost 10% yoy growth. This increase stemmed from the completion of Central Point in Q3 2018 which is also the largest retail space to have opened in the inner-city area. The total retail space will remain the same until the completion of Mandalay Commercial Complex in Q4 2020. Meanwhile, shopping malls in the outer city area are still non-existent.

Despite the flight to quality retail spaces, Colliers recorded a healthy citywide occupancy rate which averaged at 80%. With movie theatres supplementing the overall shopping experience, malls such as Ocean Super Center, Mandalay Yatanar Mall, and the newly opened Central Point led the occupancy providing an ideal retail-entertainment mix. The occupancy of some poorly maintained retail centres continued to witness declines as low as 30% level. To mitigate that, Colliers advises operators and owners to adopt effective property management measures and embark major refurbishment and redevelopment. Given the opening of Central Point, the citywide average rental rate corrected further downward to USD19 per sq meter. We expect this trend to continue in 2019 due to adjusting rates in older developments.


In addition to the promising investment potential, Colliers also sees opportunities for more growth in Mandalay’s hotel market. Colliers found that the total number of airlines flying directly between Mandalay and China has increased from five to nine by the end of H2 2019. The data published by Ministry of Hotels and Tourism in Q1 2019 reveals that the number of tourist arrivals to Mandalay region has reached over 240,000 with 70% yoy increase of Chinese tourists, an indication that the recent easing of visa requirements has been relatively successful.

Although the rise in number of Chinese travelers has buoyed the overall arrival in the previous years, the average length of stay and expenditure will be lower than that of western visitors. Under the current “Look East” policy coupled with cheap flights, even more Chinese, Koreans and Thai tourists are expected to drive the ongoing tourism upsurge. Given that majority of the future hotel projects and investments in Mandalay such as Pullman Hotel by New Star Light and MGW Intercontinental by Mandalay Golden Wings are still mostly geared towards the upper-scale segment, Colliers encourages both hoteliers and developers to venture into the untapped mid-scale category that would be more bankable with current tourism landscape.

As tracked by Colliers, no new upper-scale hotel was launched in 2018. Although the total supply remained unchanged at around 1,200 rooms, a total of four upcoming projects, collectively representing approximately 750 rooms is anticipated in 2019. Meanwhile, the average daily rates of upper scale hotels in 2018 trailed a downward trend varying between USD70 and USD165. The citywide average occupancy rate increased by 10% yoy to 62% while hotels with smaller room configurations performed better due to altering visitor profile and predilection. Colliers urges hoteliers to either adjust the rates or push for differentiation in terms of both services and offerings that are geared towards the rising number of Asian visitors. Initiatives that would help hotels embrace the current visitor trend would include aligning marketing activities towards independent Asian travelers, adopting regional payment platforms such as Alipay and WeChat Pay, showcasing experiential offers on social media platforms such as Weibo, Band and Instagram, and promoting hotels on review sites such as Mafengwo and TripAdvisor.

Primary Authors:

Hpone Myint Thu
Assistant Manager | Research | Myanmar
+95 (0) 9 425 006 777
[email protected]


Paul Ryan Cuevas
Senior Research Analyst | Research | Myanmar
+95 0 9 960 381 584
[email protected]

Ye Htun Thet Paing
Senior Researcher | Research & Advisory | Myanmar
+95 (0) 9 505 9431
[email protected]

Source: Collier


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