At Scipio Services, we offer bespoke consultancy and real estate advisory services to your organization as you seek to enter the emerging Myanmar market. Our surveying includes assessments of current occupancies and asking prices for commercial, residential, and industrial spaces. We continually survey and report to provide up-to-date analysis for Myanmar real estate market and projections for the future.
Real estate in Yangon is currently a seller’s market. A 2012 report by Myanmar Survey Research showed the price of land in Yangon increased nearly five-fold from 2002 to 2011, though informal analysis of the market for corporate offices and expatriate residences seems to indicate that actual prices increased even more aggressively in the last 18 month period.
A few large residential and commercial projects have been announced to break-ground in the coming months that could relieve some of the stress on supply, but these projects are advertising completions by 2015 and in the meantime only a few office conversions from retail space have provided relief.
On the demand side, organizations from the Asian region are ratcheting up their involvement and western organizations are increasingly stepping in ever more frequently as we approach 2015. Given the current near-exponential trend in market rates, we expect prices to continue their trend upward for commercial and even more so for residential at an alarming rate until 2015; though this is largely dependent upon the continued diplomacy, reform process, security situation, and 2015 elections.
||Advertised rate per year
||Actual rate per year
||Interior construction costs
||$70.00 – $100.00 per sq. ft.
||$76.00 – $117.00 per sq. ft.
||$55.00 – $90.00 per sq. ft.
||$42.00 – $78.00 per sq. ft.
||$44.00 – $92.00 per sq. ft.
||$35.00 – $75.00 per sq. ft.
||$16.00 – $36.00 per sq. ft.
||$17.00 – $42.00 per sq. ft.
||$25.00 – $45.00 per sq. ft.
Sole-purposed commercial office space within the notable business towers, or prominent locations of Yangon. These office buildings are known for accommodating organizations that seek a prominent identity.
Grade B: Office space within a mixed-use building or a sole-purposed building of smaller size containing fewer facilities, less than ideal location, or are lacking in maintenance.
Grade C: Functional space within a mixed-use or residential building that has been converted to office space; generally lacking facilities like a reception, common areas, or maintenance.
Sole-purposed commercial office space in Yangon is limited, few world-class business towers exist, and hotels which formerly occupied offices have been opting to convert back to renting nightly rooms as leases come due. The result is a fierce competition for the organizations that must operate to a level of premiere identity, and business towers demanding a premium rate with sometimes extraneous fees. Organizations that choose not to afford the business towers have opted to find second tier hotels, or they have taken large walled residences. The movement to large residences has put an added stress on the available residential market.
Payment terms vary for commercial one-year leases because the business towers structure these terms as a way to compete for occupants. That being said, the equivalent terms are normally 50% down payment or paid in advance. A three month security deposit is normal but also varies, and some properties charge a 13th month whereas others charge an inflated cost per square foot or maintenance and electricity fees.
The most important consideration is the difference between the advertised price per square foot (sq. m) and the evaluated actual price per square foot (sq. m) when making a decision. We’ve found the actual rate per square foot to be 6%-17% higher than the rate advertised.
A lease is normally structured by one or two agents/brokers; with one representing and marketing on behalf of the seller and the other representing the buyer. In almost all instances a prospective occupant must work through an agent/broker. Sometimes, the occupant will never meet the landowner except to sign to the lease agreement and transfer the payment. The standard residential fee to a prospective occupant is a 13th month.
For residential properties, local brokers have indicated that vacant and live-ready apartments and properties stay on the market for less than three months and prices for new tenants are not unheard of doubling each year. As the residence lease negotiation process begins, landowners are quick to understand their opportunity and can change their offered price even by the day.
Office space in sole-purposed business towers has become so competitive that many multi-national corporations (MNCs) and large non-governmental organizations (NGOs) have begun occupying larger walled-residences. This movement to residential-then converted office space, has fueled competition for remaining large residences, limited supply, and has created a near-exponential upward trend in market rates.
Typical payment terms for a residence one-year lease, is the entire year paid in advance, with a 13th month paid to the agent/broker, and often a security deposit of an additional 14th month. A residence advertised at $4,500.00 per month really means $63,000.00 to be paid in advance, with your deposit of $4,500.00 normally returned when you vacate the property.