The rising price of rent for Yangon’s street-level shops is being driven by an influx of potential tenants, with some locations demanding six-fold increases from two years ago, store owners say.
They said that rapidly rising rental costs are eating into their profits, but constant demand for prime locations is expected to keep commercial rents high.
Shops in Yangon townships such as Kamaryut, Tarmwe and Insein are commanding as much as K3 million per month for 1500 square feet, from K500,000 for high-end locations two years ago, according to Phoenix Real Estate Agency owner Ko Htun Htun.
“Yangon Region has a booming commercial rental market, especially this year because a lot of businesses want to open shops and showrooms downtown and other main places,” he said.
Much of the growth in demand stems from opening industries such as cell phone shops, which face bright prospects, he said.
Retailers say high rents are eating into profit margins of some and dissuading others from setting up shop in the first place.
“The rental fees and property costs are often larger than the size businesspeople can invest,” said a spokesman for the Myanmar Retailers Association.
Ko Htun Htun said many store owners were stuck with renting, as purchase prices had climbed far out of reach for more retailers.
“A shop owner wanting to buy land or a house in good
location would have to pay up to K3-K4 billion. So renting is generally better than buying,” he said.
U Min Ko opened a phone service shop on 33 Street in Kyauktada township, paying 450,000 per month for 1250 square feet. With a year-long contract, he says his shop is often in the red during slow months.
Store owners in Yangon’s outskirts also claim to see large recent increases in rent.
Ko Zaw Nge, owner of a guitar shop in Thauwana township, said his monthly rent increased by 20 percent to K120,000 over the last three months.
“This is a very high fee for me,” he said. “If the price continues to increase in the future, I’m worried about the long-term viability of the shop. I don’t sell my products every day.”
Source: Myanmar Times
Learn about the Office Rental and Service Office Market in Yangon at The State of Service Office Business in Yangon