SINGAPORE — Property developer Yoma Strategic Holdings has won approval from the Myanmar Investment Commission for a lease extension that will let it redevelop the former headquarters of the Burma Railways Company into a five-star hotel.
The approval, obtained after protracted negotiations with the authorities, yesterday drove shares of Singapore-listed Yoma sharply higher amid heavy volume as investors piled into the stock.
Yoma closed at the day’s high of 44 cents each, a 12.8 per cent jump from the previous close, with about 26.5 million shares changing hands, making it the seventh-most-actively-traded stock on Singapore Exchange by volume.
“The news is positive for the company. The site is in a prime location and we expect it to do fairly well once it is completed,” said Mr Tan Kok Keong, chief executive of Singapore-based property consultancy REMS Advisors.
Yoma, through Meeyahta International Hotel, in which it holds an effective interest of 80 per cent, and with joint venture partners, plans to develop the entire site — comprising the Grand Meeyahta Hotel and the former railway headquarters built in 1877 — in the heart of downtown Yangon into a mixed-use development, it said in a regulatory filing with Singapore Exchange late on Wednesday.
The heritage railway building will be redeveloped into the Peninsula Yangon hotel, it said.
Yoma had in November 2012 announced the planned acquisition of an 80 per cent interest in the 4ha site based on the issuance of a new master lease of 70 years. However, the group said last June that it would proceed with the acquisition, but with existing leases of 24 to 26 years.
Yoma on Wednesday said it would commence immediately on steps with Myanmar’s Ministry of Rail Transportation to finalise the lease extension. It did not give further details on the extension.
“Based on current legislation by the Myanmar government, the longest lease for a foreign investor is 50 years, with the subsequent add-on of 10 years for two subsequent rounds, subject to negotiations. As the announcement is not specific, there is no certainty on how long the extension of the lease would be,” said Mr Tan.
The Myanmar property market and its hotel industry, in particular, have been drawing investors for the past few years as the isolated country opens up to the world.
“Among sectors, the hotel sector in Yangon is most appealing, as room rates are high. There are also not many international-standard hotels in operation now. Despite the substantial readiness of hotels projected in the next three to four years, the lack of construction of hotels over the past 20 years limits supply,” said Mr Tan.
Source: Today Online