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Yangon’s F&B market – A real estate perspectiveMarch 2017
• Success story of Myanmar real estate market
• Limited amount of stock
• Growing number of foreign brands interested in entering the market
• High occupancy rates
• Buoyant rental levels
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Yangon’s retail market – Overview
Yangon’s retail market – Supply
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• Supply currently severely outweighed by
demand
• However retail space is increasing
quickly
• Supply increased by c.14% in 2016 – up
to almost 2.7 million sq ft Gross
Leasable Area (GLA)
• Approximately 1.4 million sq ft of new
space due to complete in 2017
• More than 50% increase year-on-year1.25
1.75
2.25
2.75
3.25
3.75
4.25
2014 2015 2016 2017 (Forecast)
Mill
ion
s of
sq
ft(G
LA)
Retail supply, sq ft (GLA)
Yangon’s retail market – Demand
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• Demand increasing
• 2014-2017 has seen entry of many foreign brands via franchises:
Yangon’s retail market – Occupancy rate
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• Extremely high occupancy rates of over 90% in all prime, 2nd tier and even tertiary schemes
• Junction City
• Due to complete end of March 2017
• Already reporting c.100% pre-letting levels in its mall
• HAGL Myanmar Plaza
• Phase 1 mall has very high occupancy levels
• Developer set to add further retail to Phase 2 in 2017/18
Yangon’s retail market – rental levels
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• Average retail rent = c.$2.9 per sq ft per
month
• Top developments e.g. Myanmar Plaza have
achieved rents as high as $5 per sq ft per
month
• Even higher rents for certain key F&B units
• Junction City quoting $5 - $10 per sq ft but
average rent is $5 per sq ft per month
• Retail on the brink of rising above office
rental levels
2.0
2.2
2.4
2.6
2.8
3.0
3.2
2013 2014 2015 2016 2017(Forecast)
USD
per
sq
ft
Average rental rate per sq ft
Yangon’s retail market – Key locations
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Downtown
Midtown
Uptown
Outer City
Source: Google Maps, SPS
Yangon’s retail market – Key downtown malls
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Photo Name Size (GLA) Description Developer
Junction Maw Tin 85,000 sq ft
Retail podium, including
gym and cinema, under 2
residential towers. Opened
in 2010
Mostly local tenants.
Shwe Taung
Group
Sule Square 64,583 sq ft
Attached to the famous Sule
Shangri-la Hotel (formerly
“Traders Hotel”).
Mostly office space, with a
few floors of luxury retail.
Shangri-La
Hotels
Yangon’s retail market – Key midtown malls
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Photo Name Size (GLA) Description Developer
Myanmar
Plaza347,168 sq ft
22-storey Grade-A office
tower, 5-storey retail
podium including shops,
fashion, F&B outlets,
anchor supermarket.
HAGL Myanmar
Junction
Square183,000 sq ft
Opened in March 2012,
including 270 shops, a
Citymart supermarket
and 3 cinema screen.
Currently being
expanded.
Shwe Taung
Group
Yangon’s retail market – Key upcoming malls
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Photo Name Size (GLA) Description Size (GLA)
Junction City
(opening March
2017)
93,244 sq ft
New high quality development
including retail podium, office
tower and Pan Pacific hotel.
Shwe Taung
Group and
Keppel Land
Time City
(expected to be
opened in 2017)
96,718
sq ft
5 storey retail podium with
850 shops, plus office tower.
Crown
Advanced
Construction
Co., Ltd.
Kanthayar
(opening 2017)56,000 sq ft
Retail podium to service 5*
hotel, grade A office tower,
serviced apartments and
luxury condominiums above.
Asia Myanmar
Shining Star
Co., Ltd.
(AMSS)
Yangon’s retail market – Future outlook
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• Retail likely to continue to perform well over the next few years
• Supply will increase
• But more foreign brands will enter the market
• Growing consumer class
F&B in Yangon – Fast food brands
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F&B in Yangon – Other popular brands
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Operating Conditions – Retail mall F&B units
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Positives Negatives• Facilities in-built, e.g. exhaust ducts
• Sufficient power and water
• Garbage disposal / collection systems
• Footfall traffic
• Better open-plan space
• Monthly/quarterly rental payments
• No issues with neighbours
• Parking provision
• Lacking character
• Higher rents
• Not many malls
• Not many available units
• Very few malls allow sale of alcohol
Operating Conditions – Stand-alone units
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Positives Negatives
• More character – heritage
buildings
• Lower rental levels
• More choice re: location
• Potential for difficult neighbours – permissions needed
• Rent usually required 1 year upfront
• No liquor licenses for units near pagodas, monasteries or
schools
• Power issues
• Lack of water supply
• Communal back of buildings can often be unsanitary
• May need to install kitchens and bathrooms
• No footfall
• Limited parking
Operating Conditions – External factors
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• Very few cold storage premises/companies currently operating
• Difficult regulatory environment – interpretation can vary from township to township
Operating Conditions – Capex
• If rent required 1 year upfront, can represent 30-40% of capex
• Liquor Licenses: $7,000 - $10,000 plus annual renewal fee
• Will need to import kitchen equipment
• Furniture is expensive and poor quality
• Fit out and licensing costs = c.$80-$100 per sq ft for a good quality restaurant/bar
About Slade Property Services
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• Founded in 2013 by Hugo Slade, a British Chartered Surveyor
• Registered with and regulated by the Royal Institution of Chartered Surveyors (RICS), guaranteeing the highest
ethical and professional standards
• The only company in Myanmar with two employees who are fully qualified members of the RICS and RICS
Registered Valuers
• Our services include:
• Market Research
• Valuation & advisory
• Development consultancy
• Sales, marketing and leasing, on behalf of
both landlords and tenants/purchasers
• Investment and joint venture advisory
• Property and facilities management
• We specialise in:
• Residential
• Office
• Retail
• Industrial
• Development land
• Hospitality (hotels and F&B)
• Education
For more information, please contact:
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Hugo Slade, BSc (Hons) MRICS
Managing Director
Phone: +95 (0) 1 381609
Mobile: +95 (0) 9 421058866
Email: [email protected]
Verity Ramsden, BA (Hons) MSc MRICS
Associate Director – Valuation & Advisory
Phone: +95 (0) 1 381609
Mobile: +95 (0) 9 260020299
Email: [email protected]
Address: Unit #1-05A | MWEA Tower | 288/290 Shwedagon Pagoda Road | Dagon Township | Yangon | Myanmar
Website: www.sps-myanmar.com
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