SPA, Yoma Strategic unveil ‘landmark’ project for Yangon

By Stuart Deed   |   Monday, 03 December 2012 

An artist’s impression of the finished Meeyahta development in downtown Yangon. (Yoma Strategic Holdings )

The former Ministry of Railways head office and the surrounding 10 acres in Yangon will be transformed into a US$350-million mixed use “landmark” project, a spokesperson for the company planning the project said last week.
Serge Pun and Associates (SPA), in conjunction with Singapore-listed Yoma Strategic Holdings, announced on November 20 that it would redevelop the company’s 10-acre plot, which houses FMI Centre, Grand Mee Ya Hta Hotel and a heritage-listed building, into a 2-million-square-foot mixed-use residential, commercial, retail and hospitality project at the heart of Yangon’s central business district.
Cyrus Pun, SPA group’s director responsible for real estate development , told The Myanmar Times on November 28 that the Grand Mee Ya Hta Hotel would be demolished, while the former Burma Railways Headquarters building would be restored and developed into a 5-star hotel that will form the centrepiece of the project.
“It’s a great location and will become a landmark of Yangon when it’s completed,” Mr Pun said, adding that the company is in the process of seeking Myanmar Investment Commission (MIC) approval for the project.
“We are blessed with a fantastic location – we are right by Bogyoke Market where we can get the most traffic, we have an historical building on site – it’s one of the 180-odd heritage listed sites in Yangon under the Heritage Trust, and I’d say it’s one of the more prominent ones,” he said.
Assuming Yoma Strategic’s shareholders approve the proposed transaction the project will be owned by MIC-approved Meeyahta International Hotel Limited (MIHL), a joint venture between SPA as the Myanmar partner and Yoma Strategic as the foreign partner, which announced its intention on November 19 to buy an 80 percent interest in MIHL with the associated rights to participate in the development of the 10-acre site, a Yoma Strategic press release dated November 20 said.
Yoma will pay $81.28 million for the shares in MIHL, the release added.

An artist’s impression of the finished Meeyahta development in downtown Yangon.  (Photo: SUPPLIED / Yoma Strategic Holdings)

When completed, the project will include two office buildings, two serviced apartment towers, two hotels and one retail mall. The expected cost of the project is about $350 million, he said, adding that the company is in discussions with Myanmar Investment Commission to obtain approval for the development and seek an extension of the land lease, which is set to expire in 15 years but has the possibility of extension, to 70 years.
“We’re applying for the extension of the land lease. You have to understand that in a project of this scale, of this investment size, the remaining term of the lease will not be long enough for me to justify this sort of money,” Mr Pun said.
“This is an existing site, project and investment that we have, we are just applying for a revision and renewal of the terms of the land lease because we already own the land site. … What we’re doing is going back to the government and saying that we’re going to upsize our investment. Given all the foreign investment interest in Myanmar now, we do see the economy likely to grow very rapidly and quite frankly this city is in short supply of all types of real estate.
“Without sufficient office space, hotel and accommodation it will be harder for foreign investors to come in and operate. The government acknowledges that this is an issue and they’re very keen to promote growth in high-quality real estate. So far in our meetings with the authorities they’ve all been very supportive of this project. They want us to start as soon as possible. They want to give their full support to help out with all the procedures and processes,” he said.
While the company has developed artist renderings of the project Mr Pun, who is the son of SPA, FMI Holdings and Yoma Strategic Holdings chairman Serge Pun, said it will take about 12 months to complete the design process, with the first buildings to be finished about three years later.
Funding for the project will be generated by Yoma Strategic, which issued a notice to the Singapore Stock Exchange on November 20 to announce it had completed a private placement exercise to raise S$101 million of equity by selling 192,853,000 new shares.
“The interest on our stock is more than what we can give. There’s no shortage of interest from investors to come in and fund Yoma for all its opportunities in Myanmar,” Mr Pun said, adding that the share issue is not intended solely for the Yangon project.
He said Yoma raised about S$101 million in cash in the placement, some of which will be contributed to the project. He added that one of the two serviced apartment towers will be sold to generate cashflow to help fund the project.
Mr Pun said the first building would not be delivered for about four years.
“The design of the project will take a year to complete so we’re looking at the end of 2013 to start construction. And the first part of the site will probably open three years from then, so we’re looking at a four-year timeframe before the first part can be delivered to the market,” he said.
Mr Pun said he could not disclose the names of the construction contractors the company is working with but said internationally renowned architectural firm Aedas, which planned Marina Bay Sands in Singapore, is handling the design. He added that Meinhardt will be the structure, civil engineering and M&E consultant.
“The team we’ve gotten on board so far are very much at the top of the game. These are all big internationally reputable firms. If you were doing a high-profile project in Singapore or Hong Kong you’d be using these types of people as well,” Mr Pun said.

An artist’s impression of the finished Meeyahta development in downtown Yangon.  (Photo: SUPPLIED/Yoma Strategic Holdings)

The new buildings will be built around the former Burma Railways Headquarters, which will be refurbished and made into a 5-star hotel, Mr Pun said.

“We need to understand that this is an important asset for us, albeit one that is a small part of the project – the heritage building is about 10,000 square metres, while the whole development will be over 180,000 square metres or so.

“However, it will be the focal point. In terms of the traffic, the ingresses and egresses are designed so that you see as much of the frontal façade of the historic building as possible. And the high-rises will be built surrounding this historical building with enough spacing so as to give the full view and yet not be overly imposing or detract from the vista,” he said.

Mr Pun added that the company is still waiting for specific guidelines from the Yangon Heritage Trust regarding preserving and conserving heritage buildings.

“I think we’re in the position where we can contribute to this process as well as set some kind of precedence for conservation. We’re bringing in specialists to see how we can best conserve it. It’s a sensitive issue because there’s always the contention between balancing how to make it functional and at the same time preserve as much as possible the historical elements of the building,” he said.

He added that the company expected the building to be finished within four years but added, “with restoration of historical buildings you never know how complicated it can be until you actually start it and then run into problems.

“It’s a very complex process – we’ll find problems as we go along. … We have this plan to deliver it within the four-year timeframe and if everything goes smoothly it may well be completed before then,” he said.

However, the project also necessitates the demolition of the Grand Mee Ya Hta building, which Mr Pun said would cost the company about $1 million a year in lost revenues.

“We had quite a lot of debate over this – it was not an easy decision to take given that it’s still a relatively new building. There’s a lot of sentimental value as well … but we came to the decision after thinking long and hard that the project would ultimately be a lot better if we take the pain at the beginning and knock it down.

“Right now the Grand Mee Ya Hta sits quite close to the middle of the site so without taking it apart we cannot space out the mixed use new buildings efficiently and sensibly.”

Ref:mmtime