LOCATION, location and location – they’re the three priorities would-be renters have in mind when seeking retail space in Yangon. That’s why the bright lights of crowded downtown trump the new, safe, well-serviced buildings in the outer townships, real estate sources say.
Most commercial property in downtown Yangon is old. But renters are prepared to put up with outdated infrastructure in exchange for easy access to where the action is. The advantage of location is driving up downtown rents to new highs.
“Downtown is packed with a lot of 60-year-old buildings, especially in Lanmadaw, Latha, Pabedan and Kyauktada. Space is precious, and the rental for 1 square foot in Mahabandoola Road has jumped to K1700, double what it was four years ago. Renters choose location over building quality, and will pay more for a downtown rental than for space in a newly built block in outlying Mingalar Taung Nyunt, for instance,” said U Zaw Zaw, manager of Unity real estate.
“Along Anawrahta Road in Kyauktada township, the rental cost is K1.5 million for 1250 square feet space is K1.5 million per month whereas it is K600,000 in distant townships for the same space,” he said.
“These places are hard to get, so renters do not care much about services as long as the building is structurally safe. Having a space there gives them access to related entities like gold shops, branded fashion stores and food courts,” he added.
Would-be tenants can spend years on waiting lists for a downtown space, and empty premises are snapped up in less than a month, said U Zaw Zaw.
Renters after a good location are not unaware of the potential risks. U Zaw Zaw added “Some contracts include a clause allowing for the refund of rental charges if YCDC declares the building unsafe.”
He said most downtown old buildings are colonial-style four-storey structures with 14-foot ceilings, allowing the construction of mezzanines that could have both commercial and residential use.
U Zaw Zaw said Mingalar Taung Nyunt and Tarmwe offered many 20-year-old high-rise blocks. Typically a block near Yuzana Plaza would charge K950,000 for 900 square feet, 25 percent less than a comparable downtown commercial rental.
U La Win Htun, marketing manager of Asia Land real estate agency, said: “Chinatown is a hot-spot commercial sector in Yangon, crowded with people and businesses.” There could be a price difference of up to 40pc between downtown and outlying properties, he said.