Yoma eyes 2020 finish for Landmark project
The Singapore-listed company said yesterday it has received long-awaited lease extensions and expects to have its multi-million-dollar Landmark Development project finished in 2020.
YOMA Strategic expects to have its multi-million-dollar Landmark Development finished in 2020 and will contribute up to US$156 million of the total cost, the firm said yesterday.
The company unveiled the Landmark Development project back in December 2012, which will see residential, retail and office space along with serviced apartments built on a 10-acre site in Yangon.
These will be constructed around the heritage-listed Burma Railways headquarters building, which will be converted into a luxury hotel.
Ministerial changes and administrative red tape, however, resulted in Yoma Strategic spending more than three of the intervening years fighting to secure two 50-year lease extensions from the Ministry of Transport and Communications.
The lease extensions are now in place and the firm expects to have the project finished before the end of 2020, it said yesterday.
One lease extension is for the hotel – The Peninsula Yangon – and the other is for the mixed-use development, the firm said.
The mixed-use section will cost around $660 million – funded partly by $135 million in debt facilities and equity contributions of between $349 million and $400 million from the various partners, according to Yoma Strategic. The company announced in June that it had signed a shareholders’ agreement for the project.
Signatories included First Myanmar Investment (FMI), which is also owned by Yoma Strategic chair Serge Pun, the International Finance Corporation (IFC), and Japanese firms Mitsubishi Corporation and Mitsubishi estate, which are forming a joint venture in Singapore.
Yoma Strategic will own 48 percent of the mixed-use section of the project and expects to spend between $92 million and $117 million of its own money on that portion, spread between the 2016-17 and 2021-22 financial years, it said.
The Mitsubishi companies will hold 30pc of the mixed-use section, FMI 12pc, the IFC 5pc and the Asian Development Bank 5pc.
Hongkong and Shanghai Hotels will own 70pc of the luxury hotel, Yoma Strategic will own 24pc and FMI 6pc, while Yoma Strategic said it will contribute $38 million of the funds for that project.
The firm’s estimated total cash contributions for the Landmark Development take into account the fact that it has already spent around $24 million on consultation, design and preliminary project costs. Its partners will have to make pro rata contributions for their share of the project, Yoma said.
The estimates also take into account that Yoma Strategic holds an 80pc stake in the land development rights on the 10-acre site through its subsidiary Meeyahta International Hotel Limited. As a result Yoma Strategic will contribute its share of the land development rights as equity in kind.
With the lease extensions in place Yoma Strategic’s next step is to ask the Myanmar Investment Commission to approve, amongst other things, the incorporation of its joint ventures, the company said.
The firm expects to have its approvals in place and begin major work on the mixed-use portion of the project by the end of this year, it added.
If the approvals schedule holds, Yoma Strategic will make use of $135 million worth of debt facilities for the mixed-use project by March 2017 and start pre-sales for the “branded residences” sometime after April that year, the company said.
A dog waits outside the Landmark Development project site in downtown Yangon.