Yangon's citywide occupancy rate has risen above 84 per cent thanks to a lack of new projects released since this time last year. However, rental rates have marginally declined.

While the price of rent is already fairly competitive, Colliers International Myanmar sees a "vastly untapped market for lower-tier but better-quality projects".

"We strongly recommend developers to introduce alternative options instead which cater to most expatriates’ modest budgets. These projects can be designed with basic but functional facilities, but still offer modern comforts," Colliers said.

In a recent Yangon serviced apartment market analysis released by Colliers International Myanmar, it was reported that Yangon only witnessed renovation and expansion initiatives from the already existing developments for the past four quarters.

Research Analyst of Colliers International Myanmar, Mr Paul Ryan Cuevas says a further upward movement in occupancy level towards the end of the year is most likely, given the limited supply.

“For 2019, a decrease is likely temporary as demand prospects appear promising. However, the trend should be more pronounced across lower-tier but modern serviced apartments," Mr Cuevas said.

Competitive rental prices

According to the report, rents are becoming more competitive. Colliers says operators have started lowering their rents by 1 - 3 per cent, despite the lack of new projects.

"Although upscale developments have witnessed limited price movements, the anticipated rise in the competition should exert further downward pressure on rental levels in the next two to three years," Colliers said.

Mr Cuevas says the anticipated improving business climate in the country will persistently play a crucial role in shaping the demand for serviced apartments in Yangon.

He adds that with the government’s determined efforts in further improving and setting more economic reforms and policies, the number of inbound international firms is expected to continue rising, ultimately driving an increase in foreign manpower requirements.

“Further liberalisation in the banking, manufacturing, and retail industries, as well as the eventual opening of the insurance industry in the coming years, should provide an added boost to demand going forward," Mr Cuevas said.

Sources: Colliers International Myanmar

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