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
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