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Entire show here – http://www.rte.ie/news/player/world-report/2013/0707/
Published in July print edition
YANGON – The sweltering midday heat and choking cement dust are no hindrance as sandal-clad laborers shoulder cement bags up five and six and seven flights of stairs, yelling as they go at slower-moving and less-weighed-down colleagues to move aside.
On half-finished floors either side, men – and a few women – mix cement and lay bricks and slap plaster on half-done walls, bantering as lunch hour approaches.
Two years in the making, by the end of 2013 site manager Naing Win Aung says the building will be ready to move in to – all ten floors of pricy condos with – eventually – the obligatory gym and pool overlooking the verdant purlieu of Yangon’s Kandawgyi Lake.
But for now, there are mounds of freshly-mixed plaster and jutting steel-fixings in the part-finished towers – being built by local construction company Yadanar Myaing. It’s a stellar location – a mile to the left as you face the lake is the primus inter pares of all Yangon’s landmarks – the Shwedagon Pagoda – the gilded centerpiece of worship for Myanmar’s majority Buddhists.
But if the view from the top of the towers is spectacular, the price matches. At US$150 per square foot and with each condo measuring 1829 square feet, that’s almost US$300,000 per unit. “All sixty are sold already,” says Naing Win Aung, his office wall covered in artist impressions of similarly-lavish apartment blocks planned for elsewhere in the city.
Such eye-watering prices are fast becoming part of Yangon’s new urban legend – a crumbling old colonial outpost at the centre of a goldrush prompting some office space rentals to exceed prices in much more developed “first-world” cities.
In some of Yangon’s few suitable office locations – such as Sakura Tower and Centerpoint – floorspace is currently on average around US$60-70 per square meter. But across the road from Sakura Tower, construction company Shwe Taung Development is building a rival complex – an annex to the well-known Traders Hotel – that will provide 14 floors of offices by the end of 2015. The biggest foreign investment project in Myanmar over the past year is the US$300 million office, hotel, apartment and shopping complex being built by a Vietnamese-backed group and going up beside the old Sedona Hotel – but that is not likely to be finished before 2017.
But in the meantime, adding to the available supply of office space should see prices drop, says property agent May Htet Aung, of Power 7 Real Estate. “Hopefully the cost will come down to fifty dollars or less,” she says. “As more construction finishes, there will be more office space.”
The current dearth of space is slowing up the much-touted goldrush to Myanmar and the attendant emerging market hype.
“A big pharmaceutical company came to me looking for offices,” she recalls. “But when they saw how expensive they said no, and they are postponing their business here because of that!”
That wasn’t just a one-off. “I had the same experience with two or three big companies,” she laments. In a similar vein, Masaki Takahara, head of Japan’s overseas trade office in Yangon, says that despite his country’s new found big spender attitude towards Myanmar – recently pledging 20 billion yen to the proposed Thilawa industrial zone and port outside Yangon for example – Myanmar’s poor infrastructure is holding back investment.
“For now, there is a lack of infrastructure in Myanmar,” he says, adding “but we are hoping these issues can be solved.” Japanese lending will not only help bring Thilawa online – but will aim to boost Myanmar’s flickering electricity supply and improve roads – two key issues that need addressing to reduce costs for investors, and, perhaps, to justify the bank account-emptying property prices in Yangon.
In the meantime, a new venture in Yangon is trying to offset the lack of office space by providing around 300m sq. of serviced offices for companies to rent.
Marc Rudolf von Rohr of Myanmar Access, a partner company in the enterprise, says that local businesses are asking about the location – citing their perceived need to have a base closer to where prospective foreign partners stay during their reccie visits to Yangon.
“I was surprised at that, at first, but many Myanmar companies have their HQ farther out the city, and they’re seeing that they need somewhere closer to the hotels and downtown if they can meet easily with foreign businessmen.”
Von Rohr says however that he expects most of the interest to come from foreigners. “There’s blue chip interest from Thailand and Singapore, companies whose names you would know,” he outlines.
Many foreign businesses, he says, are just looking at opportunities in Myanmar, for now, so temporary rented facilities often suit their needs. “People come, they have meetings, they look around, they don’t necessarily start operations so soon,” he assesses. “It might be like that for some time yet,” he adds.
Part of the reason companies are slow to invest in Myanmar, it seems, is not just big-ticket infrastructure such as electricity, but the nitty-gritty of securing even a small office space. “Getting an a viable and affordable place here can be an ordeal,” he says. “You need reliable power, internet, you need to sort out a lease. Many places are unfinished.”
An ordeal, too, might be an apposite description for what would-be renters looking for a place to live in Yangon sometimes endure.
Emmanuel Jaquet, a Canadian living in Yangon for ten months now, says that “it took around fifteen visit to different places,” before he and his girlfriend found a worthwhile apartment within budget.
“We wanted to share at US$1000 a month,” he says. “But my girlfriend saw so many places that were just not finished, were dirty, had no facilities, but people were charging these crazy prices.”
The couple’s house-hunting adventures took in some encounters with some unorthodox interior design. “We saw one place that had a shower in the kitchen,” says Jaquet, stressing the “in” to emphasize the idiosyncrasy.
After finally finding a suitable place, Jaquet says the couple’s troubles continued. “The landlord was happy to take our year’s rent upfront,” he says, “but anytime something needs fixing, we have to wait weeks. In the end we just decided to get it fixed ourselves and sent the landlord the bill.”
Such stories are legion among foreign tenants coming to Yangon, numbers of whom have “picked up a lot,” over the past year, according to May Htet Aung.
It is standard practice in Yangon for landlords to wanta full year’s rent upfront – with little chance of refund if for whatever reason the person has to leave the country. “The foreigner are not used to the Myanmar way,” says May Htet Aung.
As for the owners, she sighs that for the most part “they are not interested in the business of being a landlord, they just want all the money only.”
Her company plans a sort-of a clear the air event sometime this summer -“to try bring the owner and the tenant together.” She doesn’t know if this will lead to landlords adopting the more standard month-by-month payment scheduled and one month’s notice of termination, but she acknowledges that “we need to improve how the market works in out country.”
For now, that emporium is lucrative for those in the right place. The average apartment rental for foreigners coming to Yangon, May Htet Aung says, is between US$2000 and US$4000 per month. However some places go for US$20,000 per month. That’s US$20,000. To rent an apartment. “Yes, big company, petrol company, they can pay this for their staff,” says May Htet Aung.
Whether or not more spaces available will see such prices fall or not is unclear, but what is clear is that Yangon badly needs more office space and more accommodation – be that apartments or even hotels to meet demand as tourist numbers increase.
But the drive to develop Yangon – officials say that the Myanmar commercial capital could become a “mega city” of 10 million people or more by mid-century – threatens to undermine what is uniquely atmospheric city in a region where most capitals or big cities have succumbed to poor urban planning and seen the replacement of older, architecturally-significant buildings by glassy malls and ugly high-rises.
The Yangon Heritage Trust (YHT) is at the forefront of efforts to save as many of the city’s often mildew-laced and rundown old colonial edifices.
YHT Director Moe Moe Lwin says that her group does not want to impede much-needed construction of new housing and business complexes, but she says that Yangon could “lose its soul” if the drive to develop leads to destruction of the array of Victorian and Edwardian neoclassical buildings – from which Britain ran this corner of its South Asian empire.
Dismissing contentions that the buildings should be destroyed due to their colonial baggage, she says “in that case, we should have just Mon buildings here, as this place was colonized by the Burmans before.”
“They were places where and around out history took place,” Moe Moe Lwin, an architect, says of the British-built behemoths such as the City Hall – now the headquarters of Yangon’s city administration – and the old secretariat, where Burmese icon Aung San was assassinated in 1947.
The trust hopes to persuade city authorities “to set up a multilevel review body for development projects in the city,” to try balance the need for new housing and offices and hotels with the YHT’s push to save it’s heritage.
One controversial project that is going ahead, however, is a new three storey shopping mall being built in the Peace Park, the red steel frame of which already juts across the view of the nearby Shwedagon Pagoda, to the chagrin of some.
“That land in the park should be for the people, not for a private company,” says Moe Moe Lwin.
At sundown in the Peace Park, a scattered few couples nuzzle under bushes, half-hidden in the twilight, and here and there, a few kids play football under the eyes of watchful, sometime scolding mothers. To one side, the buzz of angle grinders drowns out the chirping of birds, where workmen, minus protective glasses, light up the darkening evening with the spark of welding at the new building site.
Kyaw Zin Min, a Yangon resident out for an evening stroll with his girlfriend, says he’s not sure whether the new mall is suitably-located.
Saying that that it is “too close to such a precious monument (referring to Shwedagon pagoda),” he pauses, adding that “but we are needing development for our economy as well”
That’s the balance, perhaps, that Yangon needs to find, as new buildings go up and property prices fall down, and at the same time, as heritage devotees hope, there’s a way found to preserve the city’s sepia-tinged downtown.
Looking again at the shopping mall going up across the road from the pagoda, Kyaw Zin Pin thinks aloud. “If it is not so high then it will maybe be ok,” he says.Show