John Pellegrini joined Slade Property Services in November 2017 and is the Director and Head of Valuation and Advisory. Coming from a background of mining and power operations, John began his career in the property industry through the banking industry when he realised there was a lack of qualified valuers in special projects, specifically energy and mining. 

WILLIAMS MEDIA spoke to John Pellegrini about his experience and Myanmar's property market.

Tell me a bit about your new role as the Chairman of American Myanmar Chamber of Commerce Real Estate, Hotels & Tourism Committee?

This inaugural committee, following the establishment of the American Myanmar Chamber of Commerce, previously operated as a representative office from Thailand.  The mission statement of the Real Estate, Hotels & Tourism Committee is – Shedding the light on opportunities and challenges in real estate, hotels & tourism in Myanmar through education and information sharing.

You are also in valuations; who would be your typical client and how do you help them?

Yes, I am in valuations and market research. Besides the typical real estate valuations (houses, commercial buildings, warehouses), qualified in special projects and resource valuations – examples of special projects include manufacturing operations e.g. cement plants, power plants, floating glass, airports and examples of resource valuations include natural gas, coal, limestone, gold etc.. Market research conducted largely allows the client to understand the mechanisms of the local market, the typical profitability of business and areas for improvements as well as introducing local companies interested in a foreign partner.

The typical client in Myanmar is either a foreign company wishing to invest with a Myanmar company or a Myanmar company seeking international bank finance. Over last six months, there has been more demand for conducting special projects and resource valuations. 

I assist through RICS and JORC valuations with the advantage of living in Myanmar rather than being a “fly-in fly-out” valuer, that cannot fully understand the local market. 

What are some of the defining moments in the Myanmar real estate/expat history?

The main defining moment was the opening of the country to foreign investment and allowing local companies to borrow money from foreign banks with the transition of military government to civilian rule and lifting of the USA and European sanctions. This lead to a boom in construction of high-rise commercial developments primarily in Yangon. 

Expat history – three types “repats- returning Myanmar citizens that now felt confident to return and develop their own businesses, “expats” – hired foreign nationals working often for large companies on a foreign package to lead the restricting of companies to an open market and finally “empats” – embedded foreign nationals (myself include) on no foreign package and make the commitment to develop a business within the country.

Where are the key emerging markets/sectors that people should be looking to in Yangon that you think will have upside?

The key emerging markets/sectors are – industrial parks, warehouses built to international standards, and investing in local manufacturing/mining/power companies that require international funds and management to remain profitable and expand as market protections of over 50 years are removed.

Why did you first start working in the property industry?

Entered the property industry through the banking industry as there was a lack of qualified valuers in special projects especially energy and mining. My initial background was in mining and power operations. 

What advice would you have for those looking to come into markets like Myanmar and set up business?

Don’t assume your knowledge of other emerging markets is directly transferable and that you can skip taking time to understand the local market that includes conducting market research and business analysis. It often takes longer than people initially believed.

How do you or SPS best help a buyer or tenant? Help a vendor selling/leasing their property?

SPS is a Myanmar company that is owner operated and not a franchise, we all work and live in Myanmar. SPS has conducted projects across a gambit of properties and industries at over 47 sites throughout Myanmar (not just in Yangon), gaining a strong knowledge of regional markets and the large network of owners. We operate a real estate agency team with a valuation/market research team, providing up to date knowledge of market settlement prices and trends.

What would you like to see changed in the industry in 5 years?

Reduction in the limitations of foreign investment and allowing foreign banks to have full banking licenses. Continue implementation of open and transparent contract law and long-term ownership/leasing for foreigners.

What are some key opportunities in the marketplace at the moment?

Investment joint ventures with local manufacturing, mining and industrial companies, this includes restricting opportunities with local companies operating tourist resorts and hotels.

What advice do you have for people looking to buy or rent in Myanmar?

Restricted at the moment until new laws are implemented. In the short-term, critical to work with real estate and legal professionals to ensure the correct structure in regards to buying and renting.  

Where is demand currently coming from, where is the interest focused at the moment? i.e. what sectors have the strongest interest at the moment and where are the buyers based (Locals, Foreigners etc.?)

Current demand is coming from local companies realizing the need for foreign knowledge and investment and the protections of the past are being removed. Over the last two years, the boom was in commercial/residential tower development with foreign investors partnering with local companies. As this sector boom has ended, local companies are looking for investment from foreign companies in industrial, manufacturing and mining sectors.

Where do you see the Yangon residential market in 5 years?

The residential market will see a demand for apartment and condominium properties developed to international standards with the availability of parking. Landlords will need to understand that tenants/buyers will have available options and the historical landlord attitude of no maintenance and very high yields has ended. Property management will be a necessity to ensure the retention of tenants and to maximize the useful life of the building. This includes valuations, market research and analysis prior to investing in developments.

To further discuss the Myanmar property market phone or email John Pellegrini from Slade Property Services via the contact details below. 

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