As Myanmar continues to open up Yangon’s office market continues to
thrive to the extent where the city is now home to the most expensive
office rental rates in Southeast Asia.
In its latest market
report, Colliers International Myanmar noted that Yangon’s office stock
currently stands at 112,000 sqm, with more than 230,000 sqm of new
projects in the pipeline and scheduled to be completed from now until
2018.
At the end of 1Q 2014, the Yangon city-wide occupancy rate
improved by three percentage points quarter-on-quarter to 87percent,
with more than 98,000 sqm of stock occupied. As a result, rents continue
to trend upwards although at a less acute rate than seen in 2012 and
2013.
Yangon currently has the highest average monthly rent in the
region, higher than the average rents of all Southeast Asian cities. At
present, Colliers said that the average prime rent in the city stands
at US$87 per sqm. That’s more than three times rates in Bangkok and 20
percent higher than in Singapore.
Besides the lack of sizeable
supply in the pipeline, premium office buildings of international
standard remain non-existent in Yangon, according to Colliers. While
most multinational companies in general prefer to be located in a prime
office building, they inevitably settle with the best option in Yangon.
At
present, there are only four buildings in the city that are considered
better in quality. Demand for these spaces is only expected to heighten,
yet the supply of quality buildings is scant. However, as developers
see the need to attract bigger tenants, new projects are expected to
deliver decent quality spaces in the next three to five years.
Colliers predicts office rental rates in Yangon will rise by more than 25 percent in the next two years.
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Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
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