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Home  >>   Daily News  >>   Myanmar News  >> Investment  >> Myanmar Water 2013 - 3 shows set the stage for growth in the new Myanmar!
NEWS UPDATES Asean Affairs   23 September 2013  

Myanmar investments surge

MYANMAR has approved more foreign direct investment in the past five months than all of last year, but companies setting up operations in the hot frontier market face a growing problem: Southeast Asia's highest office rental rates.

Myanmar has approved FDI projects worth more than US$1.8 billion from the start of the fiscal year on April 1 to the end of August, compared with US$1.4 billion in the whole previous fiscal year, Aung Naing Oo, a director general at the Ministry of National Planning and Economic Development, told Reuters.

But he said he fears potential foreign investors will be turned away by a severe shortage of office rental space.

The wave of investment comes as Myanmar's quasi-civilian government implements political and economic reforms, initiated two years ago by President Thein Sein, a former general who led the country out 49 years of military rule and global isolation.

The European Union agreed in April to lift all sanctions on Myanmar, while the United States suspended sanctions in May last year and allowed US companies to invest through a general license. Some American executives have urged Washington to go further and lift sanctions entirely.

Most of the approved FDI came from other Asian nations, said Aung Naing Oo.

"Malaysia, which brought about US$500 million for manufacturing Nissan cars, is the biggest investor during this fiscal (year) in terms of size followed by Hong Kong and South Korea, who injected funds in the garment industry," he said.

The rising tide of foreign investment is fuelling a property boom in the commercial capital Yangon with the increasing demand for rental space feeding the highest office rental rates of any Southeast Asian city, according to real-estate firm Colliers International, which opened a branch in Yangon in July.

Colliers put the average rental rate in Yangon at nearly US$80 per square metre, compared to about US$25 in Bangkok and $30 in Hanoi.

At about US$70 per square meter, even the affluent city-state of Singapore doesn't match Yangon, it said.

Scipio Services, a Yangon-based firm that helps foreign companies establish themselves in Myanmar, puts prime office rental rates even higher. According to their survey, commercial spaces in the few business towers available jumped from $50 per square metre in mid-2011 to as much as US$90 by May this year.

Some companies choose to rent houses and villas in lieu of office space, said Brett Miller, Scipio Services' managing director. But residential rates have also shot up, with villas ranging in price from US$4,000 per month to US$25,000, he said.

As a result, some companies "are coming in with a small footprint," stationing only skeleton staff in the country, he said.

Other companies base executives in neighbouring Thailand and fly them to Yangon where they stay at hotels, said Tony Picon, Colliers' managing director in Myanmar. "I call them the 'half-pats', spending around half their time in Yangon," he said.

Aung Naing Oo said the government is taking measures to increase the supply of rental space.Myanmar investments surge

MYANMAR has approved more foreign direct investment in the past five months than all of last year, but companies setting up operations in the hot frontier market face a growing problem: Southeast Asia's highest office rental rates.

Myanmar has approved FDI projects worth more than US$1.8 billion from the start of the fiscal year on April 1 to the end of August, compared with US$1.4 billion in the whole previous fiscal year, Aung Naing Oo, a director general at the Ministry of National Planning and Economic Development, told Reuters.

But he said he fears potential foreign investors will be turned away by a severe shortage of office rental space.

The wave of investment comes as Myanmar's quasi-civilian government implements political and economic reforms, initiated two years ago by President Thein Sein, a former general who led the country out 49 years of military rule and global isolation.

The European Union agreed in April to lift all sanctions on Myanmar, while the United States suspended sanctions in May last year and allowed US companies to invest through a general license. Some American executives have urged Washington to go further and lift sanctions entirely.

Most of the approved FDI came from other Asian nations, said Aung Naing Oo.

"Malaysia, which brought about US$500 million for manufacturing Nissan cars, is the biggest investor during this fiscal (year) in terms of size followed by Hong Kong and South Korea, who injected funds in the garment industry," he said.

The rising tide of foreign investment is fuelling a property boom in the commercial capital Yangon with the increasing demand for rental space feeding the highest office rental rates of any Southeast Asian city, according to real-estate firm Colliers International, which opened a branch in Yangon in July.

Colliers put the average rental rate in Yangon at nearly US$80 per square metre, compared to about US$25 in Bangkok and $30 in Hanoi.

At about US$70 per square meter, even the affluent city-state of Singapore doesn't match Yangon, it said.

Scipio Services, a Yangon-based firm that helps foreign companies establish themselves in Myanmar, puts prime office rental rates even higher. According to their survey, commercial spaces in the few business towers available jumped from $50 per square metre in mid-2011 to as much as US$90 by May this year.

Some companies choose to rent houses and villas in lieu of office space, said Brett Miller, Scipio Services' managing director. But residential rates have also shot up, with villas ranging in price from US$4,000 per month to US$25,000, he said.

As a result, some companies "are coming in with a small footprint," stationing only skeleton staff in the country, he said.

Other companies base executives in neighbouring Thailand and fly them to Yangon where they stay at hotels, said Tony Picon, Colliers' managing director in Myanmar. "I call them the 'half-pats', spending around half their time in Yangon," he said.

Aung Naing Oo said the government is taking measures to increase the supply of rental space.Reuters


 

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ASEAN  ANALYSIS

This year in Thailand-what next?

AseanAffairs   04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More

 


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