Another high-growth industry in
Myanmar will be the Infrastructure industry with a current low base of US$10.5 billion
annual output in 2010 dollar value. By 2030, annual output will reach US$48.8
billion, representing a compound annual growth rate of 8%.
Infrastructure industry includes
roads, bridges, power plants, airports, train stations and railway tracks,
water processing plants, sewage system, and everything else any proper
community would require to live and work. In addition, infrastructure industry
includes housing and commercial office projects ranging from Class A quality top-end
projects all the way to an affordable living space for entry level support
workers.
Using Chinese aid funds, some of
the road networks have been upgraded in recent years. Entry deep sea ports are
being developed in the south east city of Dawae and in Thilawa, a town a few
miles south of Yangon. Existing airports are also being expanded while the new
airports are being built. All these projects are being built at the government
to government partnership level or with B-O-T type of partnership with large
overseas corporations.
For this article, our focus will
be more on the Residential and Office projects in the infrastructure sector.
When we first did our detailed
feasibility studies in Myanmar in 2010, we clearly identified the huge
opportunity for Grade B and C type of office buildings. While other major
players were focusing on Grade A quality office building, we advised our
clients to focus on developing Grade B or Grade C NO FRILLS office projects in
a much shorter turn-around time. Because our research showed that just as in
Russia, Vietnam or other developing countries in its early stages, Grade B or C
office yields or ROI will out-perform the Grade A spaces which required longer
construction time and also higher initial investments. Our projections turned out to be spot on (actually,
they turned out to be too conservative, according to our clients).
More such opportunities exist in
Myanmar for years to come.
Another area of interest is the development
of Residential projects. Once again, major focus for deep-pocket developers
will always be massive residential community with Grade A or B quality
buildings for deep-pocket investors and occupants. It is definitely necessary
to develop such projects when the whole country is so deprived of any real quality
residential projects.
However, we advised our clients
in 2010 to focus on Grade C level residential with No-Frills quality and basic
facilities in the project. At the same time, we also advised to include more
studios and 1 bed room units in the project mix for a singles or small
families. In addition to this, we also advised some of our more adventurous and
quality-conscious clients/partners to focus on niche luxury projects in scenic
locations to be marketed as 2nd home (or holiday home) for the super
wealthy investors/buyers in the country.
Now, in 2015, our views remain
the same as above views in 2010. In addition to the above suggestions, we do
have other niche areas that we see big opportunities in Myanmar for the next 10
years that we would be happy to discuss with your directly.
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