“Building Yangon” seminar held in Yangon on 4 April 2017April 6, 2017
Despite being enacted last year, the Condominium Law has still not had subordinate legislation released under it to make the registration of condominiums possible. As we anticipate the formation of a Committee to hear condominium applications and the release of the Condominium Law Rules, it is timely to consider infrastructure and construction projects in Yangon generally.
The seminar included an opening address from H E . Mohd Haniff Abd Rahman, Ambassador of Malaysia who noted that in respect to infrastructure projects, “The public and the private must work together. But what this really means is we all collaborate to find the best options and the best solutions for the unique opportunity that is Yangon.”
Several government representatives spoke to discuss the future of Yangon’s infrastructure from the public point of view. In particular, U Win Naing discussed the Department of Urban and Housing Development’s (the “DUHD”) policy positions and perceived upcoming opportunities in Yangon in respect of the different townships. Further, Dr Toe Aung of the Yangon City Development Committee (“YCDC”) discussed zoning and building restrictions, and YCDC’s intention to ensure that Yangon’s unique character is retained despite sustained investment into large infrastructure projects.
Yangon’s development progress was considered comparative to other cities in ASEAN indicating the huge potential that Yangon has in terms of office, retail and condominiums. Sadat Foster of Matrade spoke in depth about opportunities for Malaysian companies in the construction industry and detailed some successful projects that Malaysian companies had undertaken in the region including India and Taiwan.
Importantly, Jeffrey Martin of VDB Loi, a leading Myanmar legal advisory firm discussed how VDB Loi anticipates the Condominium Law Rules will work based upon discussions with government authorities responsible for drafting the Rules. This will involve a Condominium Development license, a Developer’s License and registration of the land as co-owned land. This process may also involve the appointment of a foreign co-developer if need be. VDB Loi will be assisting the DUHD with the drafting of the Rules moving forward and will hope that they will be workable for the successful completion of condominiums for both local and foreign infrastructure companies.
The development of infrastructure policy in Yangon is an important part of Yangon’s development, and it is hoped that it becomes a priority for the Government, facilitating projects with foreign and local investors alike.
Slow regulatory reform is depressing the Yangon real estate market, but a few quick regulatory fixes could turn the trend around very fast. That is one of the main conclusions of the “Building Yangon” market and legal update held on 4 April in Yangon. Only 5% of condo units which are offered on the market now are in fact being sold. That compares to 50% in 2014. The market was shocked in 2016 by the suspension of permits for 200 high rise buildings. There are fewer expat arrivals (affecting offices and services apartments) and tourist arrivals (affecting hospitality) which also depresses confidence, Richard Emerson of Emerson Real Estate said. But, by the same token, the planned opening up of several sectors such as insurance, megamalls and petroleum products could take up the entire stock of office space. Foreign buyers of condo’s, still not possible without Condo law regulations, might provide a boost in 2018.
“Not everyone knows that mortgages and other security is allowed in Myanmar to secure foreign loans. This has been done, tested, perfected, no problem.” Edwin Vanderbruggen of law firm VDB Loi stated. “Many developers do not know that”. “A few smart changes to the regulation of condo’s and apartments would vitalize the financing of projects”, he continued.