Interview: Developers' focus ought to be on the middle of the market

Developers should start focusing more on mid-range projects and less on high-end condos, Hnine Htet Kyaw managing director U Nanda Kyaw told Myanmar Real Estate & Construction Monitor in a recent interview.

As managing director of a contracting company and as a member of the Central Executive Committee of the Myanmar Licensed Contractors Association (MLCA), he said his experience indicates local buyers are more interested by mid-range apartments.

Generally, there is less concern about amenities or branding, and more need for local buyers to be able to purchase a property at an affordable rate, he said.

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There is a limited pool of wealthy local or foreign buyers for potential high-end projects, which in turn increases competition in these market segments. Some have bought high-end units as investments, but this has been less lucrative given the stale rental market.

Middle-class families generally choose apartments, while upper-class households often prefer having their own houses and compounds. Thus, U Nanda Kyaw said he believes the high-end condo market will find its main target audience amongst expatriates and foreigners.

U Nanda Kyaw claimed that most buyers are interested in units at maximum 2,000 sq ft, generally with two bedrooms. Most of the time, a large parking space is much more important than amenities such as pool or gym. Location is also a very important factor, and the maximum price they are willing to pay usually ranges between Ks250m-500m ($166,000-$331,000).

The lack of clarity around policy and real estate legislation is also an important factor for local developers and contractors to remain engaged in small and mid-range projects, he added.

“Even with the enactment of the Condo law, we do not really understand the application of the regulation regarding condo establishment, and what is actually defined as a condo”, U Nanda Kyaw said.

He expects the Apartment law, for which the MLCA was involved in the drafting as stakeholder, is essential to fix some of the ownership issues and transparency around real estate. However, the law might still take a lot of time to be enacted, similar to what happened to the Condo law. The law is now under discussion for amendments at lower house.

U Hnine Htet Kyaw is a local contractor working mainly on small and mid-range residential units. The business has been ongoing since 2013. At its start, they focused more on condo projects, but due to an uncertain market, they preferred to target the lower and mid-range market.

Credit: Myanmar Real Estate