Vietnamese property developer HAGL will open a massive commercial complex in Yangon, Myanmar’s largest city.
YANGON — Large commercial complexes are popping up in Yangon as foreign property developers seek to cash in on an expected surge in consumer spending in one of Southeast Asia’s least-developed nations.
Vietnamese real estate developer Hoang Anh Gia Lai will partially open a huge commercial complex this month featuring what will be the largest shopping mall in Myanmar. Thailand’s Fragrant Property and other foreign developers are planning to build similar facilities in the country’s business capital.
The Vietnamese company is shelling out $440 million to develop the HAGL Myanmar Center, located in Yankin, the prime shopping and entertainment district in Yangon. Construction on the complex, which has a total area of 73,000 sq. meters, started in the summer of 2013 and is expected to be completed in 2017.
The lower five stories of the 27-story building are opening ahead of other parts of the complex and will house retail shops and other commercial facilities. Luxury Swiss watch and jewelry brand Chopard and Italy’s Ermenegildo Zegna, a maker of upmarket men’s clothing, are opening their first stores in the country there.
The centerpiece of the HAGL project is a shopping mall dedicated to information technology products, the first of its kind in Myanmar. The mall’s target customers are the growing ranks of middle-class consumers in the increasingly vibrant commercial hub.
The skyscraper will also house some 50 clothing and cosmetics shops, more than 30 cafes and fast food restaurants and a 400-room hotel operated by Spain’s Melia group.
Upscale condominiums with 1,800 units will be built nearby. Prices for the units start at $170,000, far out of reach for average consumers in the country, who earn $100-200 per month.
The condos have proved popular among business owners and other wealthier individuals, however. The developer has started accepting advance orders for a third of the units, and 70% of them have already been sold.
Thailand’s Fragrant Property plans to build a large commercial complex in Yangon, dubbed the Nawaday Complex, at a total construction cost of some 10 billion baht ($282 million). The company has already purchased a 20,000-sq.-meter tract of land for the project.
The complex will be composed of a hotel, an office building and 100,000 sq. meters of shopping space. Construction is scheduled to begin in the spring of 2016, with opening slated for 2020.
South Korea’s Hanwha group is another foreign developer with a commercial complex in the works in Yangon. The project consists of a 22-story building housing a variety of shops and other businesses and two 30-story condominiums.
Hanwha will pour $150 million into the project. The lower six floors of the 22-story building will house commercial facilities, while five underground floors will be used for parking. The condominiums will be equipped with indoor golf courses.
Prosperity unleashed
The rush to build mammoth commercial complexes, something unthinkable during the era of military rule, was triggered by the country’s momentous political change. Following the transfer of power to a civilian government in the spring of 2011, Myanmar saw a surge in economic growth and foreign investment, leading to a shortage of commercial buildings and condominiums in Yangon.
Most of the commercial complexes contain shopping malls designed to cater to the emerging middle class in the country’s urban areas.
Myanmar is one of the poorest members of the Association of Southeast Asian Nations, with per capita gross domestic product around $1,000. The country fell behind its richer neighbors, including Thailand, as oppressive measures by the military government ended up choking economic growth.
The economic reforms implemented since the transfer to civilian rule have led to the emergence of more middle-class consumers, including the owners of small businesses and executives at foreign companies.
The country’s market for durable goods such as automobiles and household appliances is also growing.
Boston Consulting Group of the U.S. predicts that the number of people in Myanmar whose monthly income is 500,000 kyat ($384) or more will double from 2012 to 10.3 million by 2020.
Source http://asia.nikkei.com/Markets/Property/Foreign-developers-fuel-commercial-boom-in-Yangon
