Colliers International Myanmar has seen modest improvements in Mandalay's property market over the recent years. However, the real estate services firm believes that the lack of international quality developments amid robust demand prospects continues to be the city's key challenge and suggests that the market is still in a budding stage. "We advise developers to introduce more master-planned projects envisioned to offer value for money to a wide range of income levels and an upgrade in terms of living quality," said Mr. Paul Ryan Cuevas, Analyst for Colliers International Myanmar, Research & Advisory.

According to Mr. Cuevas, the availability of massive vacant land plots in the region will continue to reinforce Mandalay's strong property growth potential. "Given the available vast developable land, we believe that the property market, especially horizontal residences, is promising. Overall, we expect these plots to provide more positive prospects for developers in the future."

In spite of strong demand witnessed for landed residences, Colliers observed that developers remained focused on introducing more condominium projects. "This is perhaps an attempt from developers to imitate Yangon's previous success," said Mr. Cuevas. "In fact, the total stock of notable condominiums increased," he added. "Overall, we expect more than 500 units slated to complete within the next two years."

Meanwhile, the latest condominium unit mix leaned further towards the two to three-bedroom configurations. "The rental potential is relatively weak; while the rents remained low. Backed by the extensive marketing promotions with prices discounted at considerable levels, recent sales numbers improved," Mr. Cuevas explained. "We advise developers to focus on improving the quality instead and eventually offer products at justifiable prices," said Mr. Karlo Pobre, Associate Director for Colliers International Myanmar, Research & Advisory.

Colliers also sees promising potential for the retail sector. However, both existing and future supply appear limited. "There is a need for Mandalay’s retail market to adopt global practices," said Mr. Cuevas. Given the lack of recreational activities especially for families and among the growing young population, he recommends developers to start integrating entertainment facilities and activities in their malls like movie theatres, gaming arcades, theme parks, health and wellness hubs, activity centres, etc. "At present, many large retail occupiers, though conveniently located along major commercials roads, are still settling in to poor-to-middling quality buildings," he added.

Given the absence of dedicated office developments in the city, some retail owners opted to convert their spaces to multiuse purpose instead. Still, the majority of local offices in Mandalay still operate in retail units, shop houses or apartments, being largely present in both Downtown and Inner City zones. With many companies still unaccustomed to high-rise buildings, Mr. Pobre sees opportunities for a campus-type office instead. "We recommend that for future integrated projects, these typically mid-rise office complex, can also be strategically clustered next to retail shop houses, and still present an overall conformed development theme," he added.

As for Mandalay's hotel sector, no new sizeable mid-tier or upper-scale hotel projects were noted in 2017. However, for the subsequent year, six new projects are anticipated by Colliers to complete. For the upper-scale hotel demand, the city still maintained its seasonal trend wherein tourist arrivals only surge during the dry months of October to April. Given the region’s tourism seasonality and the rise in competition, hotels in Mandalay City witnessed continuous decline in the average daily rates. "We urge hotel developers to push for differentiation in terms of both services and offerings. And with Mandalay's rich historical and eco-tourism potential, hoteliers should promote tour packages which maximise service experiences, either in a form of excursion trips or outdoor activities. Likewise, there is a necessity for many hotels to start modernising technologies and facilities, such as upgrading communication systems and amenities," said Mr. Pobre.

Click here to download the 2017 Mandalay Property Market Report from Colliers International Myanmar.

For more information on Mandalay or to discuss the Myanamr property market phone or email Karlo Pobre from Colliers International Myanmar via the contact details below.

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