As Myanmar continues to open up Yangon’s office market continues to thrive to the extent where the city is now home to the most expensive office rental rates in Southeast Asia.
In its latest market report, Colliers International Myanmar noted that Yangon’s office stock currently stands at 112,000 sqm, with more than 230,000 sqm of new projects in the pipeline and scheduled to be completed from now until 2018.
At the end of 1Q 2014, the Yangon city-wide occupancy rate improved by three percentage points quarter-on-quarter to 87percent, with more than 98,000 sqm of stock occupied. As a result, rents continue to trend upwards although at a less acute rate than seen in 2012 and 2013.
Yangon currently has the highest average monthly rent in the region, higher than the average rents of all Southeast Asian cities. At present, Colliers said that the average prime rent in the city stands at US$87 per sqm. That’s more than three times rates in Bangkok and 20 percent higher than in Singapore.
Besides the lack of sizeable supply in the pipeline, premium office buildings of international standard remain non-existent in Yangon, according to Colliers. While most multinational companies in general prefer to be located in a prime office building, they inevitably settle with the best option in Yangon.
At present, there are only four buildings in the city that are considered better in quality. Demand for these spaces is only expected to heighten, yet the supply of quality buildings is scant. However, as developers see the need to attract bigger tenants, new projects are expected to deliver decent quality spaces in the next three to five years.
Colliers predicts office rental rates in Yangon will rise by more than 25 percent in the next two years.
Learn about the Office Rental and Service Office Market in Yangon at The State of Service Office Business in Yangon