Feb 8, 2017

Rental Rates for Office Space in Yangon Will Continue to Fall in 2017 – Colliers

Rental prices for Yangon’s offices have fallen for the second year in a row and are expected to keep drop­ping in 2017, according to a new market snapshot by real estate firm Colliers International.

Rates for commercial space fell 18 percent in the last three months of 2016 compared to the same period in 2015, and are down 33 percent from 2014 rates, the snapshot said.

Businesses now pay an average of $46 per square meter.

Collier predicted a fur­ther drop of four percent by the end of 2017. “The sizeable additional sup­ply within the next twelve months will exert further downward pressure on the citywide rate, albeit at a modest degree,” the company’s researchers said in the update.

They added that inter­national quality develop­ments “are continuously taking shape” with the Junction City Office, Crys­tal Tower and Time City Office Tower projects all due to launch in the near term.

They will contribute to more than 95,000 square metres of leasable space expected to become avail­able this year. The extra space will mark a 34 per­cent increase in the total supply of office space, the update said.

Occupancy rates rose to 61% at the end of 2016, up 16% on the year be­fore, the figures show. But the percentage of of­fice spaces laying empty is still higher than at the end of 2015, when occupancy rates were at their peak.

More than 176,000 square feet of office space is now occupied in Yan­gon, and the percentage of offices in use is expected to increase even as more space becomes available, Colliers said.

“The eventual opening of the insurance industry, along with the further lib­eralisation of the financial sector is likely to drive occupancy levels upward in 2017,” the researchers said.

“Colliers expects the government to start to streamline and expedite investment approval pro­cess which should facili­tate the entry of more for­eign companies. This will contribute to the rise in the overall office take-up rate for the year.”

Source: Myanmar Business Today