Agents see prop­erty growth in outer city

The Myanmar Times - - Business - TIN YADANAR HTUN tinyada­nar­tun@mm­times.com

LO­CAL real es­tate agents in the south-west of Yan­gon are back­ing a range in­fra­struc­ture de­vel­op­ment projects to boost de­mand for real es­tate in out­skirts of the city, in ar­eas such as Dala, Kawhmu, Kungyan­gon, Sikkyi Kanaungto and Twante town­ships.

U Aung Thu, a real es­tate agent in Dala town­ship, said in­vestors were in­ter­ested in that area be­cause of im­prov­ing con­nec­tiv­ity with projects like the im­pend­ing Yan­gon-Dala bridge.

“Many spec­u­la­tors are in­ter­ested in in­vest­ing on the out­skirts of Yan­gon these days,” he said. “In the past there was no in­ter­est be­cause there wasn’t a bridge join­ing these town­ships to Yan­gon.”

In­vestors are more in­ter­ested to buy the land than apart­ments or hous­ing units, he said. “Although the real es­tate mar­ket has cooled, spec­u­la­tors are look­ing at the land sur­round­ing Yan­gon.”

The Dala-Yan­gon river bridge will be con­structed be­tween down­town Yan­gon’s Lan­madaw town­ship and Phone Gyi Road in Dala town­ship.

Last Novem­ber the Myan­mar and South Korean gov­ern­ments agreed that South Korea’s Eco­nomic De­vel­op­ment Co­op­er­a­tion Fund would is­sue a US$137.8 mil­lion loan over 40 years at 0.01 per­cent in­ter­est to fi­nance the bridge, which is es­ti­mated to cost around $168.2 mil­lion. Myan­mar’s con­struc­tion min­istry will pay the rest.

Work is likely to be­gin in 2017, U Kyaw Li, per­ma­nent sec­re­tary at the min­istry told The Myan­mar Times in August.

Mean­while, agents are hop­ing that the po­ten­tial new city de­vel­op­ment projects – an am­bi­tious plan to build seven new cities around the out­skirts of Yan­gon - will even­tu­ally come to fruition and lead to in­creased de­mand, said U Aung Thu.

Un­cer­tainty sur­rounds the new city de­vel­op­ment projects, how­ever, as they are cur­rently await­ing fur­ther re­view un­der the new gov­ern­ment’s plan­ning, as it as­sesses project pri­or­i­ties and de­vel­op­ment value for res­i­dents.

Other lo­cal ini­tia­tives such as the World Bank’s Na­tional Com­mu­nity Driven De­vel­op­ment project, which pro­vides fund­ing and tech­ni­cal as­sis­tance to a num­ber of town­ships to com­plete their own in­fra­struc­ture de­vel­op­ment, will bring bet­ter trans­porta­tion and in­fra­struc­ture to many town­ships, mak­ing them ap­peal­ing in­vest­ment op­tions, U Aung Thu added.

De­spite un­cer­tainty sur­round­ing the South­west New City - one of a num­ber of satel­lite cities planned as part of the new city de­vel­op­ment projects - it would ben­e­fit Seikkyi Kanaungto and Twante town­ship trans­porta­tion, he said, while and the World Bank’s project has in­fra­struc­ture up­grades planned for Kawhmu and Kungyan­gon town­ships.

If the Dala-Yan­gon bridge is then con­structed these town­ships will then be di­rectly con­nected to down­town Yan­gon, fur­ther im­prov­ing the trans­porta­tion links and bring­ing new job op­por­tu­ni­ties, said U Aung Thu.

“The land in these un­der­de­vel­oped town­ships has po­ten­tial for high de­mand, but the land price has not gone up in line with other ar­eas,” he said.

Ko Kyaw Naing, a res­i­dent real es­tate agent in Kawhmu town­ship, said that although de­mand for land in that town­ship was gain­ing trac­tion.

The new roads be­ing built should prompt more in­ter­est from land in­vestors, Ko Kyaw Naing added.

“Now that new roads are be­ing built by the gov­ern­ment, trans­porta­tion is get­ting bet­ter and in­vestors are show­ing more in­ter­est,” he said. “In the past, it could take one day to get to down­town Yan­gon be­cause there were no con­crete roads. Now it’s down to three hours and if we get the Dala bridge it will be 30 min­utes from Kawhmu town­ship.”

Kawhmu and neigh­bour­ing town­ships are lack­ing in job op­por­tu­ni­ties and the long jour­ney makes down­town com­mut­ing dif­fi­cult, said Ko Kyaw Naing.

Still, spec­u­la­tion was one thing, real in­vest­ment in gar­ment or bev­er­age fac­to­ries, would be key to im­prov­ing the area and mar­ket sus­tain­abil­ity, he added.

Given the con­ges­tion in cen­tral ar­eas of the city, the out­skirts of Yan­gon were cer­tainly a po­ten­tial area for de­vel­op­ment, said U Toe Aung, deputy head of Yan­gon City De­vel­op­ment Com­mit­tee’s City Plan­ning and Land Ad­min­is­tra­tion Depart­ment and di­rec­tor of Ur­ban Plan­ning.

“Although over 1000 peo­ple are liv­ing in 1 acre in down­town ar­eas, less than 10 peo­ple are liv­ing in 1 acre on the out­ly­ing town­ships of Yan­gon,” he said.

He said he could not con­firm, how­ever, the sta­tus of the planned new city projects cur­rently un­der re­view.

De­vel­op­ing the out­skirts and cre­at­ing jobs would help re­dress the im­bal­ance in population den­sity, and should help re­duce traffic prob­lems and un­em­ploy­ment in the de­vel­oped ur­ban cen­tre of Yan­gon, he said.

‘Now that new roads are be­ing built ... in­vestors are show­ing more in­ter­est.’

Ko Kyaw Naing Kawhmu town­ship agent

Photo: Aung Htay Hlaing

A mo­tor­cy­clist rides along a road in Dala town­ship at the site of the new bridge that will link the ru­ral town­ship with Yan­gon.

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