In January this year, Karlo Pobre, Head of Colliers International’s Research and Advisory team in Myanmar came up with 10 predictions on the Myanmar property market for 2017. At the end of July 2017, Asian Property Review interviews Karlo (KP) and Tony Picon (TP), Colliers Vice Chairman (Myanmar) on how many of those predictions have come true. — photography by Jan Yong (Except interviewees’)
Karlo’s 10 Predictions (summarised) :
1. Flight to better quality serviced apartments
“With better quality serviced apartments completing, tenants will start to move away from poorly maintained and older buildings. Stronger demand is anticipated for new limited or mid-tier serviced apartments as opposed to the upper-scale.”
2. Insurance companies to help fuel demand for office space
“The eventual opening of the insurance industry, along with the further liberalisation of the financial sector will drive occupancy levels upward in 2017.”
3. More focus on business and budget hotels
“With majority of the future projects geared toward the upper-scale segment, developers are likely to refocus their plans by tapping into the business and budget travellers’ needs.”
4. Continual woes for residential condominiums
“A lacklustre performance in the condominium sector will continue to persist given the sheer volume of remaining inventory. Signs of recovery may surface in the mid and uppermid segments but will remain inadequate to help buoy the overall sales take-up. Land prices will remain generally high making potential projects unprofitable. This is on top of the high cost derived from an onerous car parking requirement.”
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5. Long-term housing loans in the pipeline
“The banks will attempt to design mortgage schemes to encourage genuine housing demand. However, with the high interest rate climate, consumer interest will appear initially weak.”
6. Stronger interest in manufacturing, warehousing and logistics facilities
“Myanmar’s low labour cost and attractive demographic fundamentals will further lure international companies in 2017. More manufacturing, warehouse, and logistics facilities will be required, but the high industrial rates or the lack of good quality facilities could pose a challenge. On the other hand, this could provide opportunities for developers to offer build-to suit solutions.”
7. New malls to revolutionize Yangon’s retail experience
“The retail market will be a star performer in 2017. Developers will adopt global retail practices and malls will begin to resemble that of a typical Southeast Asian City. The entry of foreign brands will be more noticeable, led primarily by F&B.”
8. Competing visions for Yangon region will cause delay
“As the government revisits plans of expanding the Yangon Region, various master plan proposals will be solicited. Competing or conflicting recommendations will create more confusion, and will cause further delay.”
9. Rising number of domestic travellers
“The rising disposable income will reflect stronger confidence in domestic tourism this year. Hotels in leisure destinations such as Ngapali, Ngwesaung, Bagan, and Inle will benefit from healthier occupancy levels, driving developers to review future expansion plans.”
10. Foreign investors will take a fresh look at Myanmar
“As the government solidifies economic policies, a brighter investment climate will resurface in 2017. Interests will build up and investors will take a fresh look at Myanmar in a rerun of the 2011-13 period when the country first appeared on the radar screen.”
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