News / Economy

    In Burma, Foreign Investment Surges, Office Rent Sizzles

    A line of vehicles drive through Shwegontai junction, one of the busiest junctions in the city, in Rangoon, July 3, 2013.
    A line of vehicles drive through Shwegontai junction, one of the busiest junctions in the city, in Rangoon, July 3, 2013.
    Reuters
    Burma has approved more foreign direct investment in the past five months than all of last year, but companies setting up operations in the hot frontier market face a growing problem: Southeast Asia's highest office rental rates.
     
    Burma has approved FDI projects worth more than $1.8 billion from the start of the fiscal year on April 1 to the end of August, compared with $1.4 billion in the whole previous fiscal year, Aung Naing Oo, a director general at the Ministry of National Planning and Economic Development, told Reuters.
     
    But he said he fears potential foreign investors will be turned away by a severe shortage of office rental space.
     
    The wave of investment comes as Burma's quasi-civilian government implements political and economic reforms, initiated two years ago by President Thein Sein, a former general who led the country out 49 years of military rule and global isolation.
     
    The European Union agreed in April to lift all sanctions on Burma, while the United States suspended sanctions in May last year and allowed U.S. companies to invest through a general license. Some American executives have urged Washington to go further and lift sanctions entirely.
     
    Most of the approved FDI came from other Asian nations, said Aung Naing Oo.
     
    “Malaysia, which brought about $500 million for manufacturing Nissan cars, is the biggest investor during this fiscal [yea]) in terms of size followed by Hong Kong and South Korea, who injected funds in the garment industry,” he said.
     
    Nissan Motor Co. plans to start a complete knock down production of its cars in Burma with a Malaysian partner Tan Chong Motor Holdings Bhd, the Japanese automaker said on Friday, becoming the first major global carmaker to be assembling cars in the Southeast Asian country.
     
    The rising tide of foreign investment is fuelling a property boom in the commercial capital Yangon with the increasing demand for rental space feeding the highest office rental rates of any Southeast Asian city, according to real-estate firm Colliers International, which opened a branch in Yangon in July.
     
    Colliers put the average rental rate in Yangon at nearly $80 per square meter, compared to about $25 in Bangkok and $30 in Hanoi. At about $70 per square meter, even the affluent city-state of Singapore doesn't match Yangon, it said.
     
    Scipio Services, a Yangon-based firm that helps foreign companies establish themselves in Burma, puts prime office rental rates even higher. According to their survey, commercial spaces in the few business towers available jumped from $50 per square meter in mid-2011 to as much as $90 by May this year.
     
    Skeletal Staff
     
    Some companies choose to rent houses and villas in lieu of office space, said Brett Miller, Scipio Services' managing director. But residential rates have also shot up, with villas ranging in price from $4,000 per month to $25,000, he said.
     
    As a result, some companies “are coming in with a small footprint,” stationing only skeleton staff in the country, he said.
     
    Other companies base executives in neighboring Thailand and fly them to Yangon where they stay at hotels, said Tony Picon, Colliers' managing director in Burma. “I call them the 'half-pats', spending around half their time in Yangon,” he said.
     
    Aung Naing Oo said the government is taking measures to increase the supply of rental space.
     
    “To solve the problem of the shortage of hotel and office apartments, we are now encouraging investors in these sectors by approving their proposals very speedily,” he said.
     
    Drastic rises in property prices are being driven partly by land speculators. Miller at Scipio Services said the government could implement a “holding tax” that would encourage landowners to either build on a property or sell it to a developer.
     
    Picon, however, was skeptical the government could enforce compliance.
     
    “For tax on unused land, the owner could build something small and say the land is being used,” he said. “Overall I find using tax often counterproductive especially when you have limited capacity within government to enforce laws

    You May Like

    Wife of IS Leader Charged in Death of US Hostage

    Suspect allegedly admitted to being responsible for American aid worker Kayla Mueller, who officials say was sexually abused and ‘owned’ by one IS member

    Year of the Monkey Could Prove Economic Balancing Act for China

    China is up against a tricky situation on the financial front, facing the need to fight capital flight while also stopping a further slide of foreign currency reserves

    Runners Attempt 26-mile South Pole Marathon in Sub-Zero Temperatures

    How alluring is running 26.2 miles at 10,000 feet when it’s minus 31 Celsius out?

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    'No Means No' Program Targets Sexual Violence in Kenyai
    X
    February 08, 2016 4:30 PM
    The organizers of an initiative to reduce and stop rape in the informal settlements around Kenya's capital say their program is having marked success. Girls are taking self-defense classes while the boys are learning how to protect the girls and respect them. Lenny Ruvaga reports from Nairobi.
    Video

    Video 'No Means No' Program Targets Sexual Violence in Kenya

    The organizers of an initiative to reduce and stop rape in the informal settlements around Kenya's capital say their program is having marked success. Girls are taking self-defense classes while the boys are learning how to protect the girls and respect them. Lenny Ruvaga reports from Nairobi.
    Video

    Video New Hampshire Voters Are Independent, Mindful of History

    Once every four years, the northeastern state of New Hampshire becomes the center of the U.S. political universe with its first-in-the-nation presidential primary. What's unusual about New Hampshire is how seriously the voters take their role and the responsibility of being among the first to weigh in on the candidates.
    Video

    Video Chocolate Lovers Get a Sweet History Lesson

    Observed in many countries around the world, Valentine’s Day is sometimes celebrated with chocolate festivals. But at a festival near Washington, the visitors experience a bit more than a sugar rush. They go on a sweet journey through history. VOA’s June Soh takes us to the festival.
    Video

    Video 'Smart' Bandages Could Heal Wounds More Quickly

    Simple bandages are usually seen as the first line of attack in healing small to moderate wounds and burns. But scientists say new synthetic materials with embedded microsensors could turn bandages into a much more valuable tool for emergency physicians. VOA’s George Putic reports.
    Video

    Video Bhutanese Refugees in New Hampshire Closely Watching Primary Election

    They fled their country and lived in refugee camps in neighboring Nepal for decades before being resettled in the northeastern U.S. state of New Hampshire -- now the focus of the U.S. presidential contest. VOA correspondent Aru Pande spoke with members of the Bhutanese community, including new American citizens, about the campaign and the strong anti-immigrant rhetoric of some of the candidates.
    Video

    Video Researchers Use 3-D Printer to Produce Transplantable Body Parts

    Human organ transplants have become fairly common around the world in the past few decades. Researchers at various universities are coordinating their efforts to find solutions -- including teams at the University of Pennsylvania and Rice University in Houston that are experimenting with a 3-D printer -- to make blood vessels and other structures for implant. As VOA’s Greg Flakus reports from Houston, they are also using these artificial body parts to seek ways of defeating cancerous tumors.
    Video

    Video Helping the Blind 'See' Great Art

    There are 285 million blind and visually impaired people in the world who are unable to enjoy visual art at a museum. One New York photographer is trying to fix this situation by making tangible copies of the world’s masterpieces. VOA correspondent Victoria Kupchinetsky was there as visually impaired people got a feel for great art. Joy Wagner narrates her report.
    Video

    Video Sanders, Clinton Battle for Young Democratic Vote

    Despite a narrow loss to former Secretary of State Hillary Clinton in last week's Iowa Democratic caucuses, Vermont Senator Bernie Sanders secured more than 80 percent of the vote among those between the ages of 18 and 29. VOA correspondent Aru Pande talks to Democrats in New Hampshire about who they are leaning towards and why in this week's primary.
    Video

    Video German Artists to Memorialize Refugees With Life Jacket Exhibit

    Sold in every kind of shop in some Turkish port towns, life jackets have become a symbol of the refugee crisis that brought a million people to Europe in 2015.  On the shores of Lesbos, Greece, German artists collect discarded life jackets as they prepare an art installation they plan to display in Germany.  For VOA, Hamada Elrasam has this report from Lesbos, Greece.
    Video

    Video E-readers Help Ease Africa's Book Shortage

    Millions of people in Africa can't read, and there's a chronic shortage of books. A non-profit organization called Worldreader is trying to help change all that one e-reader at a time. VOA’s Deborah Block tells us about a girls' school in Nairobi, Kenya where Worldreader is making a difference.
    Video

    Video Genius Lets World Share Its Knowledge

    Inspired by crowdsourcing companies like Wikipedia, Genius allows anyone to edit anything on the web, using its web annotation tool
    Video

    Video In Philippines, Mixed Feelings About Greater US Military Presence

    In the Philippines, some who will be directly affected by a recent Supreme Court decision clearing the way for more United States troop visits are having mixed reactions.  The increased rotations come at a time when the Philippines is trying to build up its military in the face of growing maritime assertiveness from China.  From Bahile, Palawan on the coast of the South China Sea, Simone Orendain has this story.
    Video

    Video Microcephaly's Connection to Zika: Guilty Until Proven Innocent

    The Zika virus rarely causes problems for the people who get it, but it seems to be having a devastating impact on babies whose mothers are infected with Zika. VOA's Carol Pearson has more.
    Video

    Video Stunning Artworks Attract Record Crowds, Thanks to Social Media

    A new exhibit at the oldest art museum in America is shattering attendance records. Thousands of visitors are lining up to see nine giant works of art that have gotten a much-deserved shot of viral marketing. The 150-year-old Smithsonian American Art Museum has never had a response quite like this. VOA's Julie Taboh reports.

    World Currencies

    EUR
    USD
    0.9008
    JPY
    USD
    116.30
    GBP
    USD
    0.6957
    CAD
    USD
    1.3951
    INR
    USD
    68.033

    Rates may not be current.