March 15 - 21 | 2014 INVESTMENT
United Overseas Pushes Ahead With $24-M Myanmar Buy Source : Myanmar Business Today, (March 18) Sydney-based United Overseas Australia (UOA) Ltd seems to be pushing ahead with its entry into the Myanmar property market in a bid to buoy its shareholder earnings and equity value. UOA said last week that it has formally agreed to pay $24 million for an 80 percent share of a Myanmar company which owns and has the rights to develop 2.414 acres of land in Dagon township in Yangon. “A formal share purchase agreement to acquire 80 percent of the shares in a Myanmar incorporated company ‘Wa Minn Properties Development Company Limited’ has now been signed by the group Chairman and Chief Executive Officer CS Kong,” UOA said in a stock market release. The cost of the first development project comprising both commercial and residential areas is estimated at $80 million, which will be funded from internal cash flow, the company said. WA Minn Properties will proceed to apply for all necessary regulatory and other approvals for the share sale. This is expected to take up to six months. In January, UOA said it had entered into a letter of agreement to carry out due diligence on the possibility of acquiring a development site to allow the company to enter the Myanmar property development market. United Overseas Australia reported a net profit of $158 million in the 2013 financial year.
Suzuki, Toyota Bid For Thilawa Manufacturing Facility Source : Myanmar Business Today, (March 15) Japanese carmakers Suzuki and Toyota are bidding for parts and manufacturing facilities in the Thilawa Special Economic Zone (SEZ), according to Myanmar Investment Commission (MIC). Aung Naing Oo, director general of the Myanmar Investment Commission, said the two Japanese auto giants and France-based auto parts manufacturer Lafarge have all made proposals to build facilities in the SEZ, which is a joint venture between Myanmar and Japan. Thilawa SEZ, which will house high-tech and labour-intensive industries, is touted as the most-advanced of several foreign investment-driven SEZ projects in Myanmar, and is expected to have state-of-the-art infrastructure. The Japanese-backed project is currently in the first phase of construction and will start commercial run in mid-2015, the zone’s management committee said last month. The committee expects Thilawa to create nearly 200,000 jobs and double foreign investment in the 2014-15 fiscal year. The committee also announced to sell 2.145 million shares of Thilawa SEZ in a bid to raise $21.8 million to fund the first phase of construction of the project.
RESIDENTIAL Low-Cost Housing Bids In Source : Myanmar Times, (March 16) The Yangon City Development Committee (YCDC) has received its first applications from would-be homeowners looking to buy apartments in Yangon’s sought after Bo Min Yaung housing development project, officials said. The 800 apartments, housed in a complex of 25 buildings located on Bo Min Yaung Road, in North Dagon township, comprise one of five such developments to be built by the YCDC. U Nay Win, deputy director of the YCDC engineering department, said they are receiving some 20 applications per day and expects that the project will begin to fill out with the March 31 deadline around the corner. “Not so many people have applied yet, but we expect more nearer the deadline,” he said. Another new housing project looking for tenants in Yangon, Bo Ba Htoo housing, has already generated about 14,000 applicants for the 448 apartments available, he said. Winners will be selected by lot by Yangon Region government and applications not selected will be automatically registered for Bo Min Yaung, said U Nay Win. Applicants need a family income of about K300,000 to cover the monthly installment costs, he added. Bo Min Yaung apartments have 160 apartments at 961.5 sq ft (86 sq m), and 640 flats at 618 sq ft (56 sq m), pricing out at K37.4 million and K25.5 million respectively. If successful, applicants retain the option of paying off the cost in three installments of 30pc and will receive a residential permit from YCDC after the final payment of 10pc once the building is complete. Bo Ba Htoo and Bo Min Yaung are expected to be completed in May 2015 with the YCDC already pledging to develop three additional complexes in the near future.
Ascott To Debut In Myanmar With New Property Openings Source :Myanmar Business Today, (March 18) Singapore-based serviced apartment operator Ascott has unveiled plans for its first property in Myanmar. The company, which is wholly-owned by real estate developer CapitaLand, has secured its first ever management contract for a serviced residence in Yangon, it said. Due to open in early 2018, Somerset Kabar Aye Yangon will feature 153 apartments, including studios, one-, two- and threebedroom units. It will form part of a mixed-use development on the junction of Kabar Aye Pagoda road and Sayar San road – a popular restaurant and entertainment area, 15 minutes’ drive from the city centre.
HOTEL & TOURISM Bagan Lodge Offers “Family Escape” Source : Myanmar Business Today (March 15) One of Myanmar’s newest boutique resort Bagan Lodge is pivoting off its proximity to one of the world’s great heritage sites by offering a family package that trades on a Burmese tradition: the use of thanaka as a face paint. The hour-long program is a component of the new hotel’s “Family Escape” deal, which also includes two nights for two adults and two children under 12 in a 55-square-metre Deluxe Room with 17-square-metre private veranda, breakfast, airport transfers and a roll-away bed.. Opened in August last year, Bagan Lodge features 85 rooms conceptualized by noted French designer Brigitte Dumont de Chassart and sits on the edge of an archaeological wonderland home to more than 3,000 ancient temples, pagodas and stupas.
Floating Hotel To Open Soon At Botahtaung Jetty Source : Eleven Myanmar (March 05) The Vintage Luxury floating hotel will soon be launched at the Botahtaung Jetty, according to the Hla Hla Pa Pa Company. “We have recruited employees who will work at the floating hotel. We are currently training the employees. Soon the floating hotel will be open,” said the company spokesperson. The luxury hotel is a renovated version of a Finnish vessel that is 106 metres long and 18.4 metres wide. The ship has a gross weight of over 2000 metric tonnes and it now consists of 104 double rooms, 2 restaurants and bars. Two new jetties have been constructed where the vessel will be docked. The project work involved expansion of Botahtaung Harbour area since July 2012. For the project, the Hla Hla Pa Pa Company bought a ship without an engine from Finland, which arrived in Yangon on August 18, 2013. The renovation of the vessel took place at the Myanma Shipyard.
Inle Lake "Not Ready" For Tourism Boom Source : The Myanmar Times, (March17) Inle Lake is not well prepared for expected growth in tourism, international experts say, following a rapid rise in visitor numbers to the site over the past few years. To help manage growth, the Institute for International Development (IID) in Yangon and the International Centre for Integrated Mountain Development, based in Kathmandu, Nepal, have developed a tourism management plan for the greater Inle Lake region, with support from the Ministry of Hotels and Tourism and the government of Luxembourg. At least 100,000 international tourists visited the area in 2012, combined with a similar number of domestic visitors to the lake, giving a minimum base of 200,000 visitors annually, the organisations say. “Through our research, which included extensive consultations in the Inle region, we found people, environment and infrastructure quite unprepared for this rapid increase in tourism. So there should be more focus on providing training and employment for local people,” IID director Joern Kristensen said last week.
Hot Air Balloon Rides to Open At Inlay Lake Source : Eleven Myanmar, (March 07) Hot air balloon rides have become increasingly popular, with tourists queuing to see some of Myanmar’s more stunning sites by air. The Myanmar Ballooning Company recently announced that it will open balloon rides over the scenic Inlay Lake in Shan State next season. The tourism season for this year ends in March so hot air balloon rides in Inlay will start in the coming tourism season. We now accept booking,” said Ni Ni Khine, an operation officer for Myanmar Ballooning. Hot air balloon rides are already popular in Bagan and Mandalay. Test runs were made at Inlay Lake last year. Balloon rides cost US$ 30 per person but may vary depending on the location. “Americans mainly enjoy riding hot air balloons. Some tourists left without riding the hot air balloons because they no longer can wait their turn for riding,” said tourist guide Sai Won Sone.
President Thein Sein Discusses Tourism Boom with Hoteliers Source : Eleven Myanmar, (March 01) President Thein Sein yesterday discussed matters related to Myanmar’s booming tourism industry with hoteliers in the Bagan Hotel Zone in Bagan Region, one of the country’s prime tourist destinations. “These three groups—government, the hoteliers association and the administration sector—need to cooperate with each other to help increase the number of tourist arrivals in Myanmar. The government will be fulfilling the requirements of basic infrastructure such as communication access, water, electricity, and airports. Moreover, tourist safety and regional sanitation tasks will also be carried out together with the administration sector,” said the president. Moreover, four hotel zones are being built in Bagan and five more hotel zones will also be implemented. The government has planned an urban development project that includes no buildings near ancient pagodas.” Thein Sein added that there will be hotel shortages whenever Myanmar hosts international standard conferences. This year alone, Myanmar is set to host the BIMSTEC meeting, the ASEAN Summit and the East-Asia Summit. Thus the number of tourist arrivals is bound to increase.
Yoma and HSH Strike Shareholders’ Deal For Peninsula Yangon Source : Myanmar Business Today, (March 18) The Hong Kong and Shanghai Hotels Ltd (HSH) and Yoma Strategic Holdings (YSH) Ltd have announced that the companies have made a definitive shareholders’ agreement for the purpose of restoring the former Myanmar Railway Company headquarters into a hotel. The agreement, subject to conditions and approval, will seek to redevelop and restore the heritage building, which dates from the 1880s and is one of the oldest existing colonial buildings in Yangon. The new hotel, to be called The Peninsula Yangon, will be HSH’s 12th luxury hotel project, and will be located on Bogyoke Aung San road in the central business district of Yangon, one kilometre north of the Yangon river and adjacent to the tourist attraction known as Bogyoke Market or Scott’s Market.
REFORMS Building Code to Shore up Rickety Construction Sector Source : DVB News, (March 12) Construction projects in Burma will soon be regulated under a national building code. The Myanmar [Burma] National Building Code, designed to ensure procedural safety and combat embezzlement, is currently being drafted, according to Than Myint, chairman of the Committee for Quality Control of High-rise Building Projects (CQHP). Than Myint, speaking at the Myanmar Construction Seminar in Rangoon on Tuesday, said planners are looking to building codes in other countries because there is no precedent in Burma, adding that drafting of the code has been in progress since 2012. “Despite continuing construction,” he said, “we have yet to enforce any regulation.” A lack of procedures or regulations for construction operation has exacerbated embezzlement in the industry — builders cut corners on safety in order to pocket extra profit — often resulting in poor quality, hazardous structures.
Yangon Heritage Trust Calls For ‘Systematic’ Preservation Of Historic Buildings Source: Eleven Media,(March 13) Yangon Heritage Trust (YHT) says that systematic management is necessary to maintain historic buildings with significant architectural design along Pansodan Road in downtown Yangon. The group says that Yangon can become one of the world‘s top cities if those landmark buildings are systematically conserved. It also blamed the authorities for constructing two new buildings on the road, saying that such construction could harm the value of the existing historic buildings worth millions of dollars. The historic Government House and Jubilee Hall were demolished and new buildings constructed in place of them. Critics say that unsystematic management has led to the disappearance of many of the country‘s landmark buildings. The World Monument Fund last year announced that it had added the city center of Yangon to its 2014 Watch List. According to data released by the Yangon City Development Committee, Yangon has 189 ancient government and religious buildings. YHT is reportedly trying to include private buildings on the list of historic architectural buildings.
New Tax Law Sees Marked Rate Reductions Source : Myanmar Times, (March 17) Parliament has approved changes to the tax law for the 2014-2015 year that will see many tax rates lowered and new tax breaks introduced as an incentive to reign in endemic tax evasion and illegal trade, officials said. However industry insiders believe the lower rates will not be enough to change current practices. On March 11, Pyidaungsu Hluttaw approved a draft on income and commercial tax rates as part of the 2014 Union Tax Law that aims to increase the tax to GDP ratio from between 3 and 4 percent to 4.5pc, a tax widening trend the government says will continue year on year. The 2014 Union Tax Law, incorporating the revised rates, was then submitted to the President’s Office for passage into domestic law on April 1. DFDL deputy managing director William Greenlee said that “the amendments are aimed to encourage Myanmar citizens and companies to comply with the tax laws and to minimize risks of tax evasion”. According to the new law, first-time property buyers will now be subject to a 5pc commercial tax for property valued up to K50 million, 10pc for up to K150 million, 20pc for up to K200 million and 30pc for property valued above K300 million. Nevertheless, taxpayers would be able to reduce tax payable on property by deducting taxes already paid from the value of the property, National Planning and Economic Development Minister U Soe Thar said last week from Nay Pyi Taw during a speech announcing the new law. “We hope these proper rates for government employees and other ordinary people will help people to know the system and participate in tax collection.” High-income earners will have a monthly tax bill, although the new laws raise the cut-off for paying monthly tax from people earning K120,000 per month to K160,000 per month. Commercial tax for luxury teak and hardwood logs, pieces and finished products was halved from 50pc to 25pc, while the same tax on jade and polished precious gems was also halved from 30pc to 15pc, soothing in part the concerns of gems dealers who claimed the previous tax was making the trade unprofitable.
YANGON (MYANMAR) H2 2013 PROPETY MARKET REPORT
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