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Management of industrial land in Myanmar

Significantly more accessible

 

Many things has happened in Myanmar and there has been extensive economic reforms which has made it more accessible to the world and because of some changes which has been enacted in 2012 the antagonism of the international economy has ceased leading to the cancellation of sanctions which has led to numerous international investments which has increased from year to year. According to the directorate of investments, foreign investments has double during 2014 to 2015 and those investments are now valued at over US$8 billion.
Increased investment led to increased real estate prices
Whenever demand increases the cost of such products also increases and this is exactly what has resulted because of increasing investments. Purchasing property in Myanmar has become significantly more costly and this is also true for industrial property which have seen a growth of 23% since 2008. Most investors in these markets that have obtained long-term land usage rights could expect to pay approximately the same amount of money for property in Yangon that investors will have to pay for equal properties in Thailand, Malaysia or Indonesia. Unfortunately despite the high cost of property Yangon does not have the same level of infrastructure that are provide by other regional markets.
The situation in Yangon
Yangon’s main metropolitan area are surrounded by four major industrial zone developments which could all be reached by truck during daylight hours. In these industrial centers a whole range of local and international manufacturing investments are situated. The amazing thing is that although all these other industrial zones have industrial infrastructure on the same level as those which can be found in Yangon the cost of obtaining these properties are significantly lower. Investors therefore has to be informed about the situation which will apply to Myanmar and for example in Pathein most investors will find that this destination has the lowest industrial and real estate costs and the actual price of property are merely 12% of the cost which one could expect to pay in Yangon. There are also various other options in Pathein that are significantly more attractive to investors than similar properties which could be obtained in Yangon.
The problem of transportation
It seems that those regions outside of Yangon simply do not have the same access to effective transportation systems which results in a situation where the effort of delivering products to end markets can be significantly higher than the costs of delivering products which has been manufactured in Yangon. Therefore although Pathein has the lowest industrial real estate costs of all destinations in Myanmar it is also true that transportation of locally manufactured products will cost significantly more thereby reducing the saving on the cost of real estate. All of these things has to be carefully considered by any business who are interested in property investments in Myanmar. Especially when there are the considerations of transporting such manufactured products to foreign markets it may become more cost effective to have such an organization centralized in Yangon. As in all business planning it will be critical to do effective research and to carefully consider all of the factors before making a final decision about possible investment.
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