Yoma Strategic has completed another step on the long road toward starting work on a 10-acre mixed-use luxury development in downtown Yangon.
The Singapore-listed firm, which has major interests in Myanmar real estate, announced yesterday in a filing to the bourse that it had signed a shareholders’ agreement with several parties involved in the long-delayed project.
Signatories include First Myanmar Investment – which is also owned by Yoma Strategic chair Serge Pun – and the International Finance Corporation, which has been criticised by some for funding a high-end project run by one of the country’s richest businesspeople, despite its mandate to invest in projects that reduce poverty.
Japanese firms Mitsubishi Corporation and Mitsubishi estate also signed the agreement. The two companies are forming a joint venture in Singapore with equity funding from the Japan Overseas Infrastructure Investment Corporation for Transport and Urban Development (JOIN), which will invest up to $200 million into the project.
Yoma’s head of real estate Cyrus Pun told The Myanmar Times that full details about the project are likely to be disclosed on July 26 following the company’s annual general meeting.
The US$400 million Landmark Development was first imagined several years ago. When complete it will include residential and office space, and a full-scale renovation of the former colonial-era Burma Railway Company headquarters into a five-star Peninsula hotel.
Yet it has repeatedly run into delays due to red tape, which Mr Pun told Reuters is a side-effect of the company’s commitment to transparency and good governance.
Myanmar’s real estate market is highly opaque – last week the Jones Lang LaSalle 2016 Global Real Estate Transparency Index ranked it 95 out of 109 markets. Despite some reforms, Myanmar “has held onto the title as the least transparent market in Asia Pacific”, the report said.
Yesterday’s announcement is subject to conditions – the Asian Development Bank must join the group of shareholders and Meeyahta Development Limited (MDL), the joint-venture project’s developer, still needs Myanmar Investment Commission approval.
Yoma’s chief financial officer JR Ching told The Myanmar Times yesterday that the ADB “is expected to accede to the agreement, once they have finalised some of their internal approvals”.
“We are also working with MIC on the approval process,” Mr Ching said.
He did not respond directly to a question on whether the project has been suspended as part of a Yangon Region government review of high-rise developments across the city saying only, “We have a positive outlook on the project and are still working with the relevant stakeholders, including the government, to proceed with the project.”
If all goes to plan, Yoma Strategic will own 48 percent of the joint-venture company, FMI will hold 12pc, Japan’s Mitsubishi companies will together hold 30pc, and the IFC and the ADB will each hold 5pc.
The two development banks will be granted “put” options allowing them to sell their MDL shares back to Yoma between eight and 11 years after their initial subscriptions.