The United Nations Children’s Fund (UNICEF) said that it pays a “steep rental” of $87,000 per month for its office in Yangon, confirming an earlier report that it was paying up to $90,000 a month for its headquarters in Myanmar’s economic hub.
Earlier, The Irrawaddy first reported that the UN agency’s massive 33,000-square feet office in Yangon’s upscale Bahan township is rented from former General U Nyunt Tin, who was a minister for agriculture during the former military regime.
However, speaking earlier to AFP Bertrand Bainvel said the $90,000 sum was “not correct” and declined to provide an exact figure for the office. “We will not release (the rental figure) because it is part of the contract that we have, but I can definitely tell you that it was one-third of the market rate. We tried to get the best return on the money,” he was quoted as saying.
In a new note in UNICEF website the agency said the end of foreign sanctions and the opening up of Myanmar have led “rising operational costs for UN agencies and other aid organisations.” It said spiralling real estate prices in Yangon have put a strain on UNICEF resources as UNICEF’s rents have nearly doubled in the past three years.
In 2012 UNICEF was given one year’s notice by the Ministry of Tourism and the owner of the Traders Hotel to vacate the premises by mid-2013, the note said. The rate the Trader’s Hotel was $1 per square foot (about $45,000 per month).
Due to the rising costs, UNICEF said the organisation searched for new smaller premises in various locations in Yangon (in Botataung, Kyauktada, Pabedan, Yankin, Kamayut, Hlaing, Mayangone and Bahan townships) and chose the “most cost-efficient option available.”
“UNICEF undertook an extensive search of some 40 premises or spaces. However the properties were either too expensive, too difficult to reconstruct as they were residential, were incomplete buildings or held potential risk of flooding,” it said.
The UN agency said the current office premises was then offered at a “competitive rent” of $2.90 per square foot.
“The owner agreed to bear the additional expense of ensuring the new building was suitable for UNICEF’s work and provided a 3000sq ft side-building free-of-charge.”
It said, however, the rent is fixed for seven years and it is a competitive commercial price in a tough market. Some international agencies have had to pay considerably more than our $2.9 per square ft for suitable space to avoid halting their programmes, it added.
UNICEF said standard due diligence on the owner and her family concluded that “none of the international sanctions in place until recently had been levied against the landlady or her immediate family and no criminal charges were extant.”
“Although allegations against a member of her family who was once a member of the previous military regime surfaced, the official had since left public office and was not subject to any criminal charges or international sanctions,” UNICEF said.
According to an AFP report, several UN offices in the city have rents of tens of thousands of dollars a month, including a large complex housing the World Health Organisation.