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Myanmar Real Estate Investment

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Contextually, the Myanmar real estate investment market has been in relative hiatus for decades. Current and future trends point to a market overwhelmed and struggling to meet demand in the short to medium term while the ‘2040 plan’ lays the foundations to eventually offer a world-class city with premium real estate at competitive rates in the long term.

Now, organizations need suitable and affordable real estate. Landowners, meanwhile, need high-quality long-term tenants and need to create suitably appointed commercial and residential spaces in order to attract the right caliber of tenants and realize a greater return on their property investment in Myanmar.

The market as a whole needs to develop transparency and openness to turn what can sometimes be an uncertain and frustrating process on all sides, into a smooth and efficient one, which is conducive to long-term co-operation, respect and mutual benefit between landlord and tenant.

Scipio Services is ideally placed to work with both landowners and tenants to ensure the right people and organizations are placed in the right real estate at the right price, to the benefit of all. Scipio’s simplified and proven “Scipio method” ensures clarity, comfort and long-term stability.

Together, we can make the most of the opportunities presented by Myanmar’s economic and political reforms and build a responsible, sustainable and profitable property market, enabling successful growth and cooperation in other areas of Myanmar’s economy and society.

It is expected that the condominium law will be ratified by the end of 2013, allowing foreign ownership and real estate investment of units in buildings taller than six stories and serviced by elevators. Many landowners are expecting to fund new land purchases, or redevelopment of their existing land or property, through pre-sales of condominium units to foreigners who want to invest in Yangon, as well as to Myanmar citizens.

We expect a large boom of condominium and mixed-use buildings aimed at attracting foreign investors and wealthy Myanmar citizens.  Foreign investors will need to select their real estate investments cautiously, selecting reputable developers and landowners. Early real estate investors who select the correct developments will find quick profits if they buy off-plan and sell before the ribbon cutting ceremony. Some real estate investors may opt to hold their condominiums and receive residual income from rents; with this strategy, we recommend the real estate investors pay particularly close attention to the developer’s and landowner’s reputations, study the location, investigate the amenities, and look at the expected level of maintenance for the project; fierce competition from later developments is expected.

Foreigners cannot own land in Myanmar.  However, foreigners are able to lease land for up to 70 years with an MIC permit (Myanmar Investment Commission).   Private sector growth is expected to step up progressively as the MIC-permitting process becomes commonplace and as we approach 2015 with continued reform and integration with the world economy.  Joint-venture partnerships and leasehold agreements with reputable landowners will allow international developers to build quality real estate for foreign tenants, relieving the current demand gap due to short supply.

There are many foreign companies who have invested in real estate with the government under Build-Operate-Transfer agreements; prominent international hotels are a prime example.

 Real estate prices in Myanmar, and particularly Yangon, are comparably high in the region due to the following:

  • Many citizens of Myanmar are reluctant to put their money in the domestic banks because the banks have failed in the recent past and the currency is drastically devaluing.
  • Land was bought with cash.  The properties are not leveraged with debt, and sellers are reluctant to sell their lands for less than they paid.
  • The government owns the great majority of the land within Yangon and Myanmar, and continues to hold the land for their own use.  In fact, very little freehold land exists; most land is actually grant land, though grant holders have the right to transfer their grant.
  •  There is not an established stock market in Myanmar; investing in real estate is perceived by many as Myanmar’s safest investment.

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