High rental costs downtown, allied with cramped accommodation, congestion and noise, are driving business and residential tenants out into the suburbs, pushing up rental costs in the leafier areas of the city.
Recent strides in the mobile phone and internet industry have made communication cheaper, acting as a push factor toward suburban development, said property experts.
“Now that you can buy a SIM card for K1500, communications are better than ever and distance from downtown is less important,” said U Tin Maung, chair of real estate agent Royal Thitsar.
“Urban stress is driving people out of town, and rents in the suburbs are starting to balance those in the city centre,” he said.
The trend was explored at a recent seminar for property experts organised by iMyanmarHouse.com at the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI) headquarters in Yangon.
Participants heard that a tenant paying K2 million to rent a 20-by-50- square-foot ground-floor flat on Ana- wrahta Road would now expect to pay more than half that for a similar apartment further out of town.
As the gap narrows, estate agents are advising clients to check transport options before renting.
U Than Oo, vice president of the Myanmar Real Estate Services Association, said although sales are slowing, the commercial and residential rental market is still going strong.
Rents are not falling, and the pool of renters is growing on the outskirts of the city where prices are still reasonable, he said.
“Rents are going up in North Dagon and Dagon Seikkan, as tenants who can’t afford downtown prices move out. In some places on the periphery, rents rival those in the city centre,” he said.
The influx of foreign companies in 2012, at a time of very limited office space in Yangon, pushed prices sky-high with space in Sakura Tower going for US$12 a square foot.
“As rental space becomes available on the outskirts, inflated downtown rents could start to fall,” he added. “Recently, office towers and plazas have been built outside the six downtown townships.”
As communications and infrastructure improve, suburban locations also suit people who have grown tired of traffic congestion, estate agents say.
“Downtown is too noisy, and spaces there are smaller. That’s why we decided to rent in Hledan instead. If we expand, we would look at Kabar Aye Pagoda Road and Than Thumar Road,” said U Maung Maung Sein, managing director of L&S Trading.
Source: Myanmar Times