Hugo Slade is the founder and Managing Director of Slade Property Services has been working in Real Estate since 2005. Hugo was the first member of the RICS (Royal Institution of Chartered Surveyors) to set up operations in Myanmar in August 2013. Since then, SPS has grown into a reconizable brand with a significant percentage of market share.

WILLIAMS MEDIA spoke to Hugo Slade about the property market in Myanmar and the outlook for 2018 and beyond.

What are the defining moments in the Yangon real estate/expat history?

Historically the real estate market has been difficult for foreigners to engage in. The most notable defining moment, other than the lifting of sanctions by the US and EU governments, has to be the opening up of the country to foreign businesses and the ability for foreign companies to participate in the Myanmar real estate market. Since then there has been a large number of real estate developments and infrastructure projects completed by foreign entities. This has spurred growth and, as a result, legislation has continued to evolve protecting foreign investments and making the business environment more secure. 

For an expat the most notable defining moments since 2012 would be the ability to use credit cards, access cash from ATMS, transfer money overseas wirelessly and to use a mobile phone with internet!

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

I believe that the industrial sector, particularly manufacturing and distribution, shows a lot of promise with regional initiatives and national development contributing to the sector’s potential. Infrastructure development presents an opportunity and is necessary to ensure continual GDP growth, such as power facilities, transportation (airports, rail and ports), and initiatives such as the One Belt One Road project will open up new opportunities in connecting with export markets. So, I believe the regional centres, such as tier 2 or 3 cities, present good opportunities across all sectors for developers and investors going forwards.

Why did you first come to Yangon to focus on property?

I was working for Cushman & Wakefield (“C&W”) in Shanghai when the Myanmar hype was at its most significant peak. I was receiving phone calls and emails from other C&W offices all over the world asking me about my knowledge of Myanmar due to my previous position as National Head of Valuation & Advisory in Ho Chi Minh, Vietnam. It did not take me long to realise the opportunity that Myanmar presented and, after doing my own research, I decided to move to Myanmar and start my own boutique real estate consultancy offering a set of boots on the ground to help with market entry or market knowledge. The initial idea was to work exclusively with C&W but it quickly became apparent that this would limit us going forwards. We currently work with all of the global real estate advisory companies on instructions originating from all over the world.

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

I would suggest finding a suitable locally based business, such as SPS, to perform as much research as possible in order to create a solid business plan. One mistake that I made when establishing SPS Myanmar was underestimating the likely costs that I would face because I assumed that the operating environment and costs would be similar to other South East Asian countries in which I had previously worked. Myanmar is a unique market with its own difficulties and challenges and it would be an error to compare to other markets.

How do you best help a buyer or tenant?

We are on the ground and we are active in the local market, giving us unique understanding and insight. We transact real estate daily and we are involved in projects of significant scale throughout the country and we are well positioned to provide advice across all sectors and regions. We provide the full range of services including market research, valuation, development consultancy, commercial/residential and industrial leasing, acquisition and sale. We have a team of both local and international agents working daily to source appropriate real estate for tenants, or buyers. We are an award winning, fully regulated chartered surveying practice under the Royal Institution of Chartered Surveyors (RICS) and our performance has been recognised by the Asia Pacific Property Awards for Best Property Consultancy, Myanmar for the past 2 consecutive years. 

How do you best help a vendor selling / leasing their property?

We have an excellent track record of leasing properties on exclusive, lead and non-exclusive bases. The most notable achievement that we can boast is achieving 100% occupancy at Vantage Tower, which is a 250,000 sqft commercial building in Yangon. We were the exclusive leasing agent for this property and we achieved significant rental returns for the landlord on secure leases with tenants locked in for good durations providing security of income for the landlord.

We are currently leasing the Kantharyar Centre, which is a 1,000,000 sqft development on Kandawgyi Lake in Yangon. We are the exclusive retail leasing agent on the shopping mall and lead agents on the office tower and serviced apartments. This is an exciting project that will completely change the Kandawgyi Lake area. We are receiving great interest in the project, which will be open in Q4 of this year.

For both of these projects we assisted the developer by creating the marketing strategy including the pricing, target tenants, competition analysis, timeframe, branding, marketing budget and an outline of the marketing methodology. We sourced PR agencies, design consultants, facilities management companies, event organisers etc to design, create, print and launch all of the marketing material and within budget. We use our existing partnerships and marketing platforms to market the property, such as listing websites, our own website, email marketing tools, lead generation tools, databases, social media, print media, television and radio. On top of this we have a dedicated leasing team that works closely with the developer and their own leasing teams to actively market the property, perform site inspection, gather all necessary information, create all documentation and negotiate all of the transactions. 

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

I would like to see more international standards used in this market. Currently it is difficult to lease for more than 1 year for most companies. It is also not yet possible for foreigners to own property and, when it is legal, it will still be a complicated and unclear process to go through. I would like to see an international regulatory body, such as the RICS, set up in Myanmar and encourage real estate professionals to obtain legitimate qualifications to guarantee professionalism, ethical practice and consistency in the industry. And finally, I would like to see a government authorized licensing body established to provide legitimate licenses to real estate brokers and agents.

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

There are opportunities throughout the market if the appropriate amount of research, planning and due diligence are done at the earliest stage of a project. A developer is able to make money across all sectors so long as a professional consultant is appointed in order to identify the gap in the market and their advice is heeded at the earliest stage before any investment is made.

What advice do you have for people looking to rent office space in Yangon?

Yangon is maturing as a commercial hub, but there are still limitations across legislation, infrastructure quality, high pricing of most buildings and the traffic congestion resulting in lengthy journey times. My advice would be, when approaching an office lease, not to compare Yangon properties and commercial terms to other locations where the tenant has experience. Yangon is unique in many regards, so budgeting and business planning should take into account the unique conditions and costs of the office market locally. These problems can be avoided by appointing a quality locally based leasing agent with international experience.

What advice do you have for people looking to rent an apartment in Yangon?

Again, as with office leasing, my advice would be to seek a professional broker’s advice, as there are many expectations that need to be managed in advance of the search and negotiations can be complicated between a foreigner and a local landlord. For example, apartments in Yangon fall into different categories depending on the structure and whether the building has a lift. These different categories have different prices associated to them, with apartments being typically cheaper than condominiums. Location is key, due to traffic congestion, so we would recommend selecting a location that is close to the tenant’s place of employment and selected infrastructure or amenities that the tenant is likely to use regularly. I would advise having a good understanding of the leasing practice in Myanmar as the brevity of lease agreements, the up-front nature of payment terms and the high prices of certain types of residential real estate can take tenants by surprise unless appropriately advised.

Who are currently leasing office space in Yangon? where is demand coming from, where is the interest focused at the moment?

As a result of our active presence in the market, including our Kantharyar Centre marketing campaign, we are well placed to comment on this in the current market. The majority of interest in office leasing in Yangon comes from tenants that are looking to relocate into new, modern buildings now that rental rates are more affordable. The majority of interest comes from NGOs, embassies and diplomatic missions, multi-national companies across all sectors and local companies that are expanding operations.

Where do you see the Yangon Office market in 10 years?

Yangon has the opportunity to develop quickly and systematically by adapting the best practices learned from the successes and mistakes of other developing nations in the region and taking advantage of technological advances that will allow Myanmar to leap-frog their neighbouring competition. As long as there is continued political, civil and economic stability and a willingness to co-operate with the international business community, then I believe that Yangon has a bright future.

To discuss the Myanmar property market or if you are considering buying or leasing in Myanmar email Hugo Slade from Slade Property Services via the contact details below.

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