Signs of recovery are emerging in the Yangon real estate and construction sector, despite lingering challenges, research company FMR says in a half-yearly review of the market.
Project cancellations and delays are expected to continue as developers reassess viability, FMR acknowledges in its Yangon Real Estate Review for the six months to the end of June.
“However, green shoots representing the market’s long-term potential are beginning to emerge after the doldrums of 2016. Stable and consistent government policy is crucial to fostering the market’s long-term success,” it says in a statement released on July 31.
The review says off-plan residential sales were generally slow in H1 at most developments and few new projects were launched.
“However, a few developments bucked the trend and there is more emerging evidence of new schemes coming into the market,” FMR says.
It says the effects of the suspension of work ordered on high-rise projects in Yangon in Q2 and Q3 last year continue to felt and several developments appear not to have been “unfrozen”.
FMR says the launch of the first phase of the multi-use Junction City development in downtown Yangon had made a “significant splash” among commercial projects.
As well as its retail mall it had also added more than 33,000 square metres of office space, “and may mark a turning point as more quality commercial space is added that present demand currently warrants”.
“With more office units coming online in the next few years, we expect further downward pressure on leasing rates,” FMR says.
The review says serviced apartments have had a strong run in recent years, but competition was likely to increase as stock was projected to double by 2020.
“Developers are turning to international companies to manage their projects in an effort to stay ahead,” says FMR.