Office space in Yangon costlier than Manhattan's
Property boom is on as foreign firms rush into a Myanmar that's now open for business
Sean Danley has spent the past six months scouting office space in Yangon after being sent to establish the Myanmar branch of his United States-based employer.
He looked in the city's sole three 1990s-era towers, where annual rents have climbed to more than US$100 a square foot, compared with less than US$75 in downtown Manhattan, according to broker CBRE Group. Too expensive, he said.
The villas he considered either did not have safety exits, were not clean, required sharing space with other companies or were in odd locations - all unsuitable to the image of his US$29 billion-in-revenue engineering and construction firm. After seeing 10 places and losing one possibility to someone faster with his "bag of money", Danley is still looking.
"We can't move into a space where someone's cooking up nasi goreng on the sidewalk all night," he said.
Developers are rushing to solve Danley's problem, one faced by hundreds of multinational companies setting up operations in Myanmar following its political opening and easing of international sanctions.
Yangon, the commercial capital, needed at least 8.7 million sqft of office space to support the influx, Yoma Strategic said. About 1.9 million sqft would be available by the end of 2015, against 600,000 now, Colliers International UK estimated.
"With rentals going up, and the shortage going to become more acute in at least the next seven years, it's an attractive market for foreign developers," said Cyrus Pun, executive director of Yoma, a Singapore-listed company that develops property in Myanmar and has seen its share price more than double since the April 2012 elections.