Japanese trading house Mitsubishi Corp said Tuesday that it has agreed with Mitsubishi Estate Co to commence work on a mixed-use landmark development project in downtown Yangon, Myanmar, in collaboration with Singapore-listed Yoma Strategic Holdings Ltd and local firm First Myanmar Investment Co.
The project, which will cover 200,000 square metres of residential, commercial, retail and hospitality space, will be based around Yangon Central Railway Station, the city’s main downtown business and commercial district, a statement said.
According to the statement, the two Mitsubishi companies will form an alliance, for the implementation of the project, through a joint venture set up in Singapore, constructing two office buildings, one condominium, one building combining a hotel and serviced apartments, and commercial facilities.
The project entails the redevelopment of a site of around four hectares, where the Serge Pun & Associates Ltd Group, a major Myanmar-based conglomerate which both Yoma and FMI are affiliated to, has constructed and operated an office building, commercial facilities, a hotel and other real estate assets, it said.
The Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development (JOIN) will also join the project, marking its first equity participation project in the field of overseas urban development, bringing the total investment commitment by the Japanese partners to approximately $200 million, the statement said.
The Asian Development Bank and the International Finance Corporation will also make equity contributions and extend funds to and the local project company, the statement added.
Yoma signed a memorandum of understanding with Mitsubishi Corp and Mitsubishi Estate to invest in the project in 2013, with a total cost of $350 million, according to earlier local reports.
Myanmar made the transition to democracy in 2011 after the military junta that had ruled the country for decades stepped down to allow a military-backed party to take over, and has since promoted economic growth through market liberalisation and the attraction of foreign investment.
The new administration, led by the country’s democracy icon Aung San Suu Kyi, came to power in April this year following after a landslide election win in November, bringing higher expectations for more rapid development.
American property consultancy firm Colliers earlier predicted that the Yangon property market in 2016 would be generally positive, suggesting increased construction throughout the year.