Lower rents lift Yangon office occupancy: Picon Deed

Lower rents are lifting occupancy levels in the Yangon office market but political uncertainty is deterring new entrants, according to a report by a new property consultancy.

Since 2016 the slow pace of economic reforms and the Rakhine refugee crisis have caused business optimism to “trail off”, Picon Deed Property Consultants says. The slowdown hit demand for office space hard and at the same time finished large office buildings were brought to the market.

With the supply overhang, office operators cut their rates sharply to get tenants to rent dedicated office space instead of condos or hybrid offices.

Picon Deed Property Consultants, set up by Tony Picon and former Myanmar Times business editor Stuart Deed, is nonetheless hopeful that banking and insurance reforms and economic growth will help lift the sector out of the doldrums.

The new consultancy has opened in Yangon’s Sakura Tower and will provide clients with market reports, custom consultancy services and leasing representation.

It has established an extensive database of market information to prepare reports for local and foreign clients, said Mr Picon, formerly with the commercial real estate agency Colliers International and chair of BritCham Myanmar.

The property sector has been lacklustre since 2015 and a period of overheating from liberalising reforms introduced by U Thein Sein’s administration. Restrictions on foreign ownership of real estate remain.

Although the government has enacted the Condominium Law and Rules in an attempt to spur construction activities the market remains largely static.

However Mr Deed is upbeat, saying that the partnership had arrived at “an exciting time” for the industry, spurred by the banking and insurance liberalisation.

“Developers, including some foreign companies, are bringing projects to market and dramatically improving standards within the industry. This offers people much better places to live and do business,” he said.

“We have a positive, long-term view of the market,” added Mr Picon. “There are condos being completed, people finally have access to credit and are buying their own homes, the Grade A office towers are filling up, there is still strong demand for new retail offerings and factories are being built that will employ thousands of people and propel the economy.”

Source: Myanamr Times

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