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Rental: The Key to Myanmar’s Real Estate Sector

With the current market situation, the purchase of completed units can be an asset for an early rental and return of investment.

Rental can be one of the encouraging reasons for investors to purchase assets in real estate market in Myanmar. According to the Myanmar Real Estate Services Association, rentals in Yangon are very active and have higher fees than neighbouring countries such as Vietnam or Thailand. Real estate experts and Aung Si Hein Real Estate company agree that rental season has started and will be extremely active, at least, until Thadingyut period.

Investing in luxury real estate can be a reliable opportunity, as with the market situation, the purchase of completed units and early renting can provide not only a return of investment, but a profit. For example, Golden City, Yangon’s first completed luxury condominium project, has very active and solid rentals: a two-bedroom apartment can be rented at US$2500-3000 per month, a three-bedroom apartment at $3500 and a four-bedroom apartment at more than $3500.

Timing is the key, as foreign investment is increasing in Myanmar which also increases, at the same time, the demand of high-end residential choices. The Condominium Law, drafted in 2013, is expected to allow foreigners to buy up to 40 percent of units in a condominium project, but still doesn’t have a confirmed approval date. This clearly benefits the rental market and the high-end condominiums which are already completed, targeting foreigner buyers who have no options but to rent in Myanmar.

Similarly, investors should take into consideration that the ongoing projects may not be as reliable as the completed units. Two hundred high-rise building projects were suspended in 2016 and were not allowed to continue until recently. The halts resulted in complaints from buyers, as they couldn’t materialise their investments or rent out their property anytime soon.

Location should be another major main consideration, as rentals increase their added value if the units are strategically located in the city. As part of a Yangon city master-plan drafted in partnership with Japan International Cooperation Agency (JICA), the Yangon City Development Committee (YCDC) targets business districts in Mindhama secondary CBD in northern Yangon, in South Dagon township, beside Bago River and a commercial zone next to Thilawa and Yankin townships, according to U Toe Aung, Deputy Head of the City Planning and Land Administration Department of YCDC. With this, the YCDC expects to ease traffic congestion in downtown areas.

Areas such as Yankin will turn into a really hot spot for work, entertainment and living purposes. International companies which have established their offices in the area and wish to provide accommodation to their employees can choose from hotels, regular condos or high-end condominiums, such as Golden City project.

 

Source: Myanmar Times

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