Record take up for office space in Yangon in Q1 2017 points to growing maturity of the sector

YANGON, Myanmar - May 5, 2017 - PRLog -- Myanmar's main commercial city experienced the highest new take up of office space in its history in 1Q 2017 with growing optimism in the future growth story of the country and an increased choice of available office space, according to the Colliers International Q1 2017 Yangon Snapshot Report.

According to Tony Picon, Vice- Chairman of Colliers International in Myanmar, lower rentals and a more diverse choice means tenants are moving from alternative space such as villas and condominiums to dedicated office space. "This is a trend that has occurred in other countries as frontier markets start to develop and generally businesses prefer office locations as befits their corporate image", he added.

Paul Ahlgrim, Senior Manager of Office Leasing Services, pointed to growing competition between office landlords for tenants especially in the downtown area. "The market has shifted over the past few years to a more tenant friendly environment with many corporates being able to be more selective while negotiating better rates" said Mr. Ahlgrim.

Supply also increased in the last quarter with the addition of Junction City office tower by Shwe Taung Group and Singapore's Keppel Land and now stands at 330,000 sq. m in total. According to The Htet Oo, Assistant Manager of Research & Advisory, the occupancy rate now stands at 64%, a 7% improvement year-on-year while rental levels remained stable this quarter at 45USD per sq. m, but overall rates dropped by 20% year on year.

"We expect rental rates to show only a modest improvement over the rest of the year as new supply still remains to be absorbed. A further, anticipated opening up of the financial sector, notably insurance, could impact the market toward the end of 2017 and into 2018" said The Htet Oo.