Economic growth and political reform in Myanmar continues to drive foreign investment, which according to DICA topped $492.62 million in the first quarter of the current fiscal year – driving the market for luxury property and mixed-use real estate development. Despite the fact that rent continues to balloon for the average Myanmar citizen and the expat community, in what many analysts believe to be an unsustainable bubble, Myanmar’s demand and thirst for luxury accommodations continues to rise.
These large-scale development projects boast the creation of properties that meet international standards to accommodate the changing face of Myanmar, which now attracts not only the international business executive but also Myanmar diaspora and an influx of global tourists seeking a high quality, unique and opulent accommodations and experience.
Amid rapid economic growth, the backdrop is forming for the developing real estate and property market, which positions Dagon Center 1 among the top competitors.
Dagon City 1 – the flagship project of Marga Landmark Development Company – is a 22-acre high-end, mixed-use property development that boasts a luxurious lifestyle experience in the heart of Yangon. Designed and built to international standards, Dagon City 1offers a branded retail zone, A-grade office complex featuring the latest technology, a five star hotel, and luxury serviced apartments to tap the expanding business environment and increasing tourist arrivals. Marga Landmark Development Company – a joint venture between the global syndicate, Marga Group and Thu Kha Yadanar, a Myanmar company – created the ambitious plans for the exclusive Dagon City 1 property, which will be located in downtown Yangon at U Htaung Bo Circle.
Marga is yet to announce when they will break ground on Dagon Center 1. The luxury property is expected to cost approximately $300 million and is expected to be completed within five years of breaking ground.
As one of the earliest investors in China, Dr Stephen Suen, chairman of Marga Landmark Development Company, said the growth and reform process of Myanmar is tremendous and unique compared to the opening of China.
“I find the speed of growth in Yangon much faster than that of China in the early 1990s,” Dr Suen told Myanmar Business Today in an exclusive interview.
Dr Suen said he remembers when he bought his first piece of land in China. “I only received a small piece of paper to prove that I was the owner. The land law was only in its infancy and there was no contract law, lawyers or dispute mechanism.”
With rapid political reform and economic liberalisation starting in 2011, and while the country still needs to pass the Condo Law and Mortgage Law – two pieces of key legislation directly impacting the development of luxury mixed-use properties – Dr Suen believes Myanmar is poised for continued dramatic growth.
“We already know the Condo Law is in the pipeline. I think the Mortgage Law is held up because the balance sheets of Myanmar banks continue to lack adequate capital. However, this is a soft issue and will likely be resolved when foreign banks are allowed to operate in the country.”
According to Dr Suen, Myanmar’s ability to conduct simultaneous political and economic reform has made the country a favourable destination for foreign direct investment. While reforms and economic liberalisation continue, “it presents a great foundation unseen in any other emerging market, including China.” Dr Suen also sees the government demonstrating immense political will and capability in producing change that will last into the future.
Marga’s project demonstrates the dominance of Asian investors in Myanmar. The country’s largest foreign investors are companies from Singapore, Hong Kong, Japan, South Korea, and, of course, China. While western countries, in particular the United States, remain hesitant to invest in the country, partly due to a belief that reforms have stalled, investors from Asian countries have no qualms with the country’s political and economic trajectory.
Beyond the benefits of political and economic reform, Dr Suen believes Myanmar’s strategic location makes the country a prime location for expanded investment and he plans to ramp up investment in the country. With interests in finance, telecommunications, and agriculture, he did not specify what form of future investments he might make.
“Myanmar is a very good location because it shares a border line with three big economies: China, India and the ASEAN states. It has easy access to the region, and is home to nearly half of the world’s population,” he said.
The firm said it is committed to impact investment and contributing to Myanmar’s social development. The development of Dagon City 1 is expected to employ over 5,000 individuals.
The company has also committed to direct two percent of its annual profits towards corporate social responsibility efforts in education, the support of elderly populations and Buddhist programs. Dr Suen seeks to multiply investment impact by encouraging other investors to enter Myanmar for the benefit of millions of people in the country.