It’s now a good time for retailers in Yangon to keep a look out for better premises from which to do business, given that rental rates are still manageable and ahead of anticipated demand, according to recent intelligence from property research firm Colliers.
With several new and modern shopping malls scheduled to come onstream and backed by a spike in the number of young people plying these developments, rental rates are expected to gradually increase in the coming quarters. As such, now is the time for retailers to book a good location to open shop so that they are better positioned to ride the emerging trend.
“The introduction of more quality malls means that rents may further trend upwards in the succeeding years. The continuous entry of foreign brands, particularly food and beverage chains, is likely to reinforce uphill pressure on rents,” Colliers analyst Paul Ryan Cuevas wrote in a November 6 report.
Before the end of the year, new retail space at Kantharyar Shopping Mall by Asia Myanmar Shining Star Investment Co Ltd, The Central Boulevard by Marga Landmark Development Co Ltd and Space @ Yankin by Crown Roofing Co Ltd – all situated within Yangon – are expected to become available.
Next year, additional space at Central Boulevard, Fortune Plaza by Excellent Fortune Development Group and Yadanar Mall by Crown Advanced Construction Co totalling more than 150,000 sq metres will come onstream.
However, aside from Inno City by Inno Co Ltd, Yoma Central by Yoma Strategic Holdings and The Garden by Kajima Corporation, which are some of the sizeable shopping malls set to debutbetween 2020 and 2021, additional supply of retail space scheduled for those years is limited.
Rental rates
Against that backdrop, Colliers is advising retailers to take advantage of the current opportunity, when choice is still available and rental rates are still low, to move into more modern and better quality premises as competition is expected to intensify in the coming years.
Already, there’s been a recent spike in interest in modern developments such as Junction City, St. John City Mall and Myanmar Plaza.
Currently, the average rental rate is around US$33 per sq m per month, which is an increase of 3 percent from the same period last year. “The introduction of more quality malls means that rents may further trend upwards in the succeeding years” according to Mr Cuevas.
He added that the continuous entry of foreign brands, particularly F&B chains, is likely to reinforce uphill pressure on rents. This year, for example, foreign brands such as Aunty Anne’s, Krispy Kreme and Coffee Bean and Tea Leaf have already entered Myanmar with grand plans to roll out more outlets.
Curated offerings
For developers, Colliers advise is to focus on more lifestyle-oriented hubs, regional shopping centres and destination malls. “In the meantime, we advise developers to push for a well-curated tenancy mix. Adding more distinctive tenants such as food halls, amusement parks, movie theaters, arcades, bowling alleys, event gathering spaces and fitness centers to shopping malls is a direct response within the industry to accommodate changing shopping behaviours and new preferences,” Mr Cuevas wrote.
These days, consumers, particularly teenagers and young adults, which represent close to half the Myanmar population, are showing heightened focus on experience, personalisation, and social engagement, which must be considered when developing new projects to increase foot traffic and value.
“Adopting these initiatives will drive value enhancement as well as help leverage over competition going forward,” Mr Cuevas wrote in his report.
https://www.mmtimes.com/news/good-time-book-switch-new-retail-premises-colliers.html