An office tower built by Zaykabar Group on Pyay Road has opened for business.
The company started to develop the site of the project in 2000, building a residential tower, which has not yet opened. Construction of Pyay Garden Office Tower began in 2013.
“We built this tower based on our own experience and office needs, taking our time to ensure the facilities are good,” said Daw Zin Zay Latt, a director of Zaykabar Group.
The nine-storey project includes security, Wi-Fi, car parking space, and automatic fire sprinkler and smoke detector systems.
It is built on 2.19 acres and features 27 offices of different sizes. Average monthly rent is between US$5000 and $6000.
The smallest offices are priced at $2787 per month, rising to $47,750 per month for a 7339-square-foot office on the building’s top floor. Eleven units have already been reserved, according to company data.
Ko Min Min Soe of Mya Pan Thakhin Real Estate Agency said that despite a slowdown in the market, the project is likely to see good demand.
“Foreign investors need office space and as more companies move into the country, demand will rise,” he said. “While sales have slowed for residential projects, the rental market is still buoyant.”
After several years of headaches due to a chronic lack of office space in Yangon, companies are at last breathing a sigh of relief as new office projects open across the city.
This year, office supply is set to double, with over 140,000 square meters of new leasable space, according to Colliers International Myanmar.
This will give businesses much more choice than in the past – at the end of 2014, the total office supply in Yangon was just 107,864 sq m of net leasable space, in dedicated office buildings such as Sakura Tower, Union Business Centre, FMI Centre and Centrepoint Tower, said the real estate agent in a recent report.
In comparison, Hanoi has 12 times as much office stock and Kuala Lumpur has more than 80 times more, with over 9 million sq m of space.
Similarly, the supply of international-quality grade-A offices in Yangon is very small, said Colliers.
New mid-to-high-end projects finished in the first half of this year include The Office @ Novotel Yangon Max, Union Financial Centre and The Strand Office Complex, as well as Pyay Garden Office Tower.
As a result of new supply, average occupancy rates fell in the first half of this year by 10.6pc compared to the second half of 2014, from 88.93pc to 79.52pc, said Colliers.
Richard Emerson, country manager for Savills Myanmar, said the office market is subdued due to the forthcoming election, scheduled for November 8. The market is in a transition phase – as it becomes more supply driven, tenants will have a stronger negotiating position, he said.
“Existing buildings at the top end of the market are coming under pressure in rental terms as more modern properties become available at more reasonable prices.”
Most landlords have not reduced their quoted prices, but are becoming more flexible in negotiating, he added.
Source: Myanmar Times