Colliers International is an international real estate services organization with a wide range of specialities from Valuation and Development Advisory/Consultancy to Brokerage and Property Management services. Joshua De Las Alas is currently working as a manager for the Advisory department leading client-specific development feasibility studies and best-use studies, development critique, and site selection studies. 

WILLIAMS MEDIA spoke with Josh about his experience in real estate and Myanmar's property market.

Who is your typical client?
Given that Myanmar is considered as one of the remaining Frontier Markets in the world, there has been plenty of interest from foreign investors/developers needing advice on property investments. Additionally, we have a continuously growing local client base that now sees the need for our international-standard advisory services given the current market trend and the increasing presence of foreign competition. All of these include experienced real estate developers who have existing assets that need reviewing or redeveloping, experienced foreign investors who are looking to enter the market, and various landlords looking to start new business in the industry.

How do you best help a developer or investor?
As a top real estate consultancy firm, it is in our best interest to provide sound advice to our Clients. This includes providing up-to-date information regarding the overall economy, development rules and regulations, and market trends and forecasts. We also provide detailed development recommendations which mainly include the project theme, positioning, design, and specifications. This development advice is reinforced by having both local and international benchmarks stemming from our knowledge of successful developments and why they work. Lastly, we reconcile this recommendation by running a cash flow analysis to forecast future returns and revenues of the proposed development. Our approach is to develop creative solutions to ensure that projects meet their development and financial objectives.  

What advice would you have for those looking to enter markets like Myanmar and set up a real estate business?
My advice for future investors in the industry is to conduct proper due diligence first. We have unfortunately met some investors who haphazardly invested in the wrong assets years ago and are now in a tough situation. In a frontier market such as Myanmar, the risks involved are relatively higher however are however manageable so long as investors are properly guided with solid market insights as well as on the current trend and future market directions. There remains a lot of untapped opportunities in the market that developers or investors could capitalize on. The property sector remains in a nascent stage in the growth cycle and still likely to trail a lengthy upcycle in the long term.

What are the opportunities in the marketplace at the moment?
As mentioned earlier, it has been observed that there is untapped demand in specific segments on particular asset types. I observed that the mid-market segment across all sectors has been underserved as affordability continues to be a concern in the industry where price and quality do not entirely match. There is a big market segment, locals and expats alike, that cannot afford what is currently being offered in the market without compromising quality. Likewise, the revenues being generated by the majority of the businesses here in Myanmar is still not comparable to other countries, which leads to certain companies having a rather tight budget when it comes to renting an office building and even for staff accommodation.

What advice do you have for people looking to buy or rent real estate in Yangon?
For foreign investors, they should be patient when looking for land to invest in. Land prices in Yangon, especially freehold land, is known to be of a relatively higher price compared to other markets, so it may take time to find one with a price reasonable enough to have a feasible development. Otherwise, if the investor wants to acquire a sizeable land plot, it may be wise to approach the different government ministries as they are known to have an abundance of land that they are willing to lease out to investors via a B.O.T. agreement. The negotiation process is extremely important and developers/investors have to be cautious with the total land premium that is to be paid before entering an agreement.

What would you like to see changed in the industry in the next 2 years?
First, it would be interesting to see a proper zoning ordinance to be enforced in Yangon, and then eventually in other major cities as well. At the moment, no property zoning ordinance is being implemented in Yangon and approvals have always been done in a case to case basis which leads to a rather confusing development landscape. Moreover, a zoning ordinance will aid in regulating and maintaining property values by limiting the size and use of certain land plots.

It would be great to see the further liberalisation of industries such as banking and finance, manufacturing, and such. I feel like great strides have been made by the recently publicized new retail and wholesale regulations, which opens an opportunity for foreign investors to freely trade in Myanmar albeit within certain parameters. News about the licenses to be given in the insurance sector is also a good example that could further the office sector.

For more information about the Myanmar property market email Joshua De Las Alas Manager at Colliers International Myanmar via the contact details below. 

This article was first published on The Mingalar Real Estate Conversation

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