MYANMAR WOOS FOREIGN INVESTORS TO “FAST-GROWING” YANGON

NEWS

With major infrastructure and logistics initiatives being pushed, on top of being home to seven million people, foreign investors should not hesitate to invest in Yangon, officials told the Yangon Investment Forum 2019 on Friday. Thaung Tun, chairman of the Myanmar Investment Commission and Union minister for investment and foreign economic relations, said Myanmar’s commercial hub Yangon remains attractive as the nation’s premier investment location, ensuring a level playing field for all investors. “Yangon has been the primary driver of our growth, accounting for 24% of the country’s GDP and growing at an average of 9.2% annually,” he said. “The city is expected to grow to over 10 million people by 2030. It has the country’s largest concentration of young and well-educated population.”


(Source: The Nation, May 16, 2019)

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RESEARCH VIEW

Yangon, being the country’s economic centre and former capital, remains to be the prime driver of national economic growth. Yangon accounts for 23% of the GDP and has grown at an average of 9.2% every year. Latest statistics from the Directorate of Investment and Company Administration (DICA) revealed that a significant proportion of the country’s foreign and local investments has remained focused in Yangon. As of FY 2017/2018, aggregate investments in the region reached USD 26 billion, representing almost half of the total approved annual investments. While there has been a slowdown in the FDI inflows over the past four years, the government’s economic outlook remains positive. As expressed by the Ministry of Investment and Foreign Economic Relations, they expect the surge of investments to materialise in the near to medium term. Investors are projected to take advantage of the opportunities that will arise from further enforcement and legislation of government policies such as the relaxation of foreign ownership restrictions on retail and construction; increased leniency in visa requirements for several of Myanmar’s major trading partners; bylaws setting out rules and regulations for global and domestic tour operators, hotels, guest houses, and regional tour guides; and amendments to the existing procurement law and business registration systems which should entice more developers to take part in the government’s promising infrastructure development programmes.

JAPAN RETAILER AEON OPENS HYPERMARKET IN THANLYIN

NEWS

Japanese retail giant Aeon Co opened a hypermarket in Thanlyin township, Yangon Region, on Friday, seeking to cash in on the growing retail sector in Myanmar’s emerging economy. The Aeon Orange Thanlyin Sakura opened in the country’s commercial capital, selling home electronics, clothing and other household products in addition to the food already offered at its 14 supermarkets. Aeon Orange Co, its local joint venture, was established in 2016 with local retailer Creation Myanmar Group of Companies and took over the 14 supermarkets in Yangon and Mandalay that had been run by Hypermart Asia Co, an affiliate of the partner. The hypermarket houses a roughly 200-sqm home appliance sales space, the largest in the Yangon area, and offers shoppers financing via Aeon Microfinance (Myanmar) Co. The new store also offers local dishes, salads and desserts in a 70-sqm dining area. It also plans to open a bakery, the statement said.


(Source: The Myanmar Times, May 14, 2019)

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RESEARCH VIEW

The number of supermarkets and hypermarkets in the city has witnessed historic progress over the past years, particularly in key residential communities and densely populated zones, as in Downtown. While Colliers considers Aeon Co.’s hypermarket in Thanlyin as a welcome addition, we still believe that prospects and opportunities are much more lucrative in developing shopping malls. Specifically, we believe that streamlined offerings should be introduced going forward, along with the lines of lifestyle-oriented hubs, regional shopping centres, and destination malls. In the meantime, we continually advise developers to push for a well-curated tenancy mix. Adding more distinctive tenants (e.g. food halls, amusement parks, movie theaters, arcades, bowling alleys, event gathering spaces, fitness centers, etc.) to shopping centers is a direct response within the industry to accommodate the changing shopping behaviors and new preferences.

GOVT STILL KEEN TO BUILD INTERNATIONAL AIRPORT IN BAGO 

NEWS

The government is still expecting to build Hantharwaddy International Airport in Bago with support from the Japanese, said U Win Khant, Permanent Secretary of the Ministry of Transport and Communications. “As Hantharwaddy is an essential airport, we’ve been trying hard to get construction started. We are seeking help from Japan to manage the construction of aircraft runways,” U Win Khant said during a press conference detailing the government’s performance in its third year in power, on May 13. 

(Source: The Myanmar Times, May 16, 2019)

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RESEARCH VIEW

In 2012, the government broadcasted the plans to add two new international airports to meet future air traffic demand in the country. One of which is the Hanthawaddy International Airport in central Bago region. The development of regional airports, especially those located in tourism hotspots, has already received government acknowledgement as an important step in developing both the tourism and transport sectors. In addition, existing plane and cargo handling services across the country are in significant need of technological support and investment. Despite the fact that Yangon International Airport has not reached to it maximum capacity, Colliers believes that Hanthawaddy International Airport will become a premier gateway for entry into Myanmar given the Bago Region's proximity to other states and regions in the country.