Yangon authorities have added their voices to calls for an end to the practice of buying industrial zone land and then holding it fallow in the hopes of flipping it for profit.
Genuine investors are often put off by the high costs for industrial land, and deputy industry minister U Myo Aung on March 17 in Nay Pyi Taw pledged authorities would crack down on the speculation.
Yangon speculators in some case are now left holding land that has slumped in value, as buyers desert the market, industry observers say. And now they stand to lose the plots they have failed to develop.
Yangon’s Industrial Zone Management Committee of the Department of Human Settlements and Housing Development has asked people who bought land in industrial zones but who had not conducted any business there as of last December to submit business plans.
The move prompted some owners to put the land on the market, where it languishes, in the absence of anyone willing to buy.
Ko Htun Htun, owner of Phoenix Real Estate Agency, said the investors had been forced to let their land at low prices. “They have to rent it for K2.5 or K3 million instead of the K8-10 million they were anticipating,” he told The Myanmar Times.
Industrial land can go for about K200 million per acre. But sales have dried up since the end of last year, agents say.
“Most landowners want to sell industrial land, but since the government asked them to account for their idle plots, demand fell off,” he said.
The government has established so many industrial zones in the city that the auction price has fallen to under K100 million per acre.
“Investors bought a lot of industrial land when the property market was hot,” said Ko Htun Htun, adding that high levels of investor interest had driven up the price of a small industrial plot from about K8 million to about K20 million.
One observer, who requested anonymity, said, “Whenever the government announced a new industrial zone, middle-level speculators could hardly get a look in. Speculation drove up the price, but now those lots are idle.”
Yangon has 29 industrial zones, including about 2400 acres of idle plots, said U Myat Thin Aung, chair of the Yangon industrial zone management committee. “We’ve received plans in respect of more than 1000 acres, but some of them don’t look serious – like an application to build a small warehouse on a large plot. We’ve received no plans in respect of about 1090 acres.”
He said the department now planned to sell those 1090 acres to businesses that would use them after buying the plots back at a reduced price.
Most of the unused plots were outside the Hlaing Tharyar industrial zone, he said.
Source: Myanmar Times