Market observers also believe that continued reforms to the economy as well as implementation of legislation such as the Condominium Law 2016 and Condominium Rules 2017 can help support more interest in property.

In that light, Colliers this week released its top 10 predictions for the property sector, including office, residential, retail and hospitality, this year:  

1. Office lease rates to rise

In 2020, the entry of better quality developments could well exert upward pressure on overall rents.  The introduction of Junction City Office Tower and Sule Square have helped sate demand downtown, given the new buildings’ premium addresses. The increasing stock of better-quality office developments elsewhere in the city will be an added impetus. Headline rents could hover between US$35 and US$45 per sq m per month. 

However, this could change should better and more space options become available. In the meantime, construction delays will most likely skew rents upward should demand continue to grow.

2. F&B to drive retail growth

In 2020, the food and beverage (F&B) segment will further grow and will be a major driver of retail space absorption in the city. Rising disposable incomes coupled with the enforcement of the Notification 25/2018 (2018 Notification), which allows 100 percent foreign ownership of businesses operating in the wholesale and retail sectors, should assist in luring more foreign F&B brands to establish a foothold in the country. 

3. Shift to property management

Developers and tenants are likely to further  realise the benefits of adopting international quality management services given the rising number of completing condominium projects in the city. Managers that take specifics such as property type, location, technology, innovation, and overall nature of landlords and tenants into consideration to provide a custom experience, will prosper in 2020.

4. Bargain opportunities to emerge

Banks with non-performing loans are likely going to tap capital market brokers to facilitate in disposing assets. The growing number of underperforming as well as distressed assets is similarly seen setting precedents for foreign investors and financial institutions to further explore the market either through outright sale, equity participation, capital debt injection/financing or joint venture partnerships. 

Promising investment opportunities resulting from such asset disposals are seen particularly in the office, serviced apartment, mid-tier hotel as well as in reconversions of underperforming upscale condominium projects.  

5. Higher industrial park demand 

Demand for international quality industrial parks will become more pronounced this year.  More developers are seen to invest in larger logistics parks and buying land at strategic locations. Private equity interest will gradually rise in this asset class due to its income yielding ability and growing demand for this asset class from various industries.

Meanwhile, with more cross-border trading taking place and manufacturing companies now interested to expand further, the government will most likely gradually start with the deployment of fully operational one-stop service centers for Special Economic Zones in the country. In 2020, the government will likely work closely with the municipalities in laying out clear rules and regulations that will further help the investors to set up their businesses smoothly in the country.

6. Industrial Zone Law to be launched

The pending Industrial Zone Law is expected to prevent rampant land speculation, bring more employment opportunities, stimulate economic growth and eventually ensure protection and guarantee for investors. Public private-partnerships in infrastructure investments are seen to effectively reduce the ongoing infrastructural deficit.  

7. Co-living space options to emerge

There exists a vast untapped potential in Myanmar, specifically Yangon, for alternative asset classes, such as dormitories, student housing projects and other co-living spaces. In 2020, these newer assets are going to be explored much more actively by investors as they look towards expanding their footprint beyond conventional real estate asset classes. 

In lieu of the narrow availability of cheaper accommodation options in the city, the growing number of people migrating from rural areas to urban Yangon should assist and influence developers to diversify their portfolio by introducing these product types. 

8. Tenant’s market in serviced apartment space

Demand is unlikely to maintain its upward momentum in 2020, despite increasing awareness among corporate travel managers (on the benefits of serviced apartments) due to the  growing number of firms looking for alternatives to high cost relocations,  itinerant professionals reducing travel budgets and combining business and leisure travel, global trade conflicts reducing corporate activity  and the upcoming national elections in the country. 

As it is shifting to be a tenants’ market, landlords or operators will become more open for negotiation and willing to reduce rents. More operators will start offering more flexible leasing contracts and payment arrangements to entice tenants, allowing for short-term stay. 

9. More affordable housing options

With ample policy support in 2020, numerous projects are expected to be launched in these segments and foreign direct investment will find its way here. Internal migration driven by the growth in industrialisation and increase in informal settlements will similarly push demand for affordable housing in the city. 

As such, more developers are seen to start addressing issues around affordability by starting with looking at reasonably priced land. In particular, site selection will most likely be geared towards alternative and accessible development sites in the immediate outskirts of Yangon. 

10. Demand in Kamaryut set to boom

The inner city will witness further increase in commercial and economic activities in the next twelve months. Amongst all the townships within this city zone, Kamaryut is forecasted to rise as an up-and-coming major business district pivoted on both existing developments in the area. These include Vantage Tower, Hledan Centre, Junction Square Mall, Novotel Max Hotel, Crystal Tower, and the recently opened Times City mixed-use project and the upcoming M Tower mixed-use project set to come onstream.

By and large, the scarcity of developable land in Downtown will pose lucrative opportunities for improved and relatively better-quality projects and infrastructure to emerge in the greater Inner City Zone. 

Source: https://www.mmtimes.com/news/ten-predictions-myanmar-property-market-year.html