Yoma eyes 2020 fin­ish for Land­mark pro­ject

The Myanmar Times - - Front Page - STEVE GIL­MORE s.gil­more@mm­times.com

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.

Photo: Thiri Lu

A dog waits out­side the Land­mark De­vel­op­ment pro­ject site in down­town Yangon.

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