Yangon Condominium Market 2014

• Accelerating success. Research & Forecast Report Yangon | Condominium Market 1Q 2014 Demand shifts to modern and better- quality condominium projects Developers in Yangon are bullish towards the residential market amid growing interest among local end-users and investors. In 1Q 2014 alone, the number of units launched, for pre-selling condominiums reached 1,594 - representing 65% of those launched in 2013. However, the considerable rise in project launches over the last six months dragged the average take-up rate to 73% (-7% QoQ) while remaining unsold inventories particularly from older and low-grade projects expand. As the sales performance for the better quality condominiums set to improve in the next succeeding months, a recovery in take-up rate is expected. The market is now witnessing a shift in demand towards newer and modern grade condominiums. Integrated residential developments with better quality facilities are now commanding higher prices. Meanwhile, the lack of clarity on the impending condominium law still leaves local investors to remain cautious. Forecast Direction 1Q 2014 – 1Q 2015 New Launches Take-up Rate Selling Price
• 2 Research & Forecast Report | 1Q 2014 | Yangon | Condominium Market Project sales launches projected to set new record high in 2014 With the renewed business interest in Myanmar, many developers are optimistic towards the residential market driven dominantly by a robust local demand; and eventually a potential surge in foreign demand, once the condominium law is enacted. As a result, local developers are currently strengthening their foothold with the number of sales launches continually increasing annually, while, foreign invested developments are starting to gain ground by pre-selling bigger scale and modern condominiums as part of their upcoming mixed-use projects. In 1Q 2014 alone, the total number of notable newly launched units in Yangon amounted to 1,594 – a substantial increase, representing 65% of the total units launched in 2013. Foreign invested developer, Golden Land Real Estate Development Co., launched the most number of units for the quarter covering the first phase of its Golden City project in Yankin Township. Meanwhile, local developers are also expanding their portfolios with new launches that collectively totalled to 1,074 units. Leading the pack for the quarter was Shwe Taung Development Co.,Ltd. with some 208 units introduced under its Hill Top Vista project located in Ahlone Township. The total number of launches this year is projected to exceed that of in 2013, as additional phases and new projects are yet to be announced and launched in the next succeeding months. Meanwhile, Yangon’s total stock of completed notable condominium projects, as tracked by Colliers, reached nearly 1,900 units as at end of 1Q 2014. The total supply stock will expand going forward as over 5,500 units are slated to complete from 2014 to 2017, or about an average of 1,375 units annually. Condominium sales slowed down, unsold inventory expanded Despite the bullish market outlook among developers, the take-up rate for pre-selling condominiums in Yangon abated consecutively over the past two quarters. As at end of 1Q 2014, the city-wide take-up rate declined by seven percentage points to 73% from end-2013’s 80%. Similarly, the rate is down by 10% versus that in end-2012. At present, the total unsold inventory is over 2,100 units which quadrupled since 2010. The take-up rate remains highest in the Outer City area at 77% as at 1Q 2014, but is lower by 6% than in end-2013. In the Inner City area, take-up rate decreased the most by 10% QoQ, down to 66%. Most of the sales of newly launched projects in the Inner City performed averagely in exception to Royal Sin Min Condominium. Despite fewer launches in Downtown Yangon, the weakening interest for the location coupled with the remaining unsold units of pre-sold lower grade projects continued to drag down the area’s take-up rate. Cumulative Launched Condominium Units Source: Colliers International Myanmar Pre-selling Condominium Take-up Rate Source: Colliers International Myanmar
• 3 Research & Forecast Report | 1Q 2014 | Yangon | Condominium Market Residential projects in integrated developments command higher prices While the subsequent decline in take-up rates was partly a result of the considerable rise in sales launches, as in the first quarter of 2014, it is likewise highly attributed to the growing number of remaining unsold inventories particularly from older and low- end projects - amid the shift in demand to new and modern condominium developments. Moreover, based on recent sales launches, the majority of the unit type remains geared towards the three-bedroom units as opposed to smaller-sized units – which the supply is scant for rental accommodation versus strong expatriate demand. The overall take-up may gradually recover over the next six months as the sales performance of the recently launched and better-quality condominium projects is expected to improve. However, the ambiguous statutes concerning the impending condominium law still limits the potential boost in sales particularly from the local investors’ market. Among the projects launched in 1Q 2014, Downtown Yangon represented the lowest average selling price, offered in 50th Street Condominium by Triple Aung Construction. Many of the projects launched during the first quarter were classified under the USD 2,000 to USD 3,000 per sq m range, except those in the Outer City area where projects are priced at an average of USD 4,000 per sq m. The quality of condominiums in Yangon varies enormously and many of the latest launches over the last six months are for higher-end developments with facilities such as swimming pools and gyms, thus commanding far higher prices. The next wave of condominiums are taking the form of lifestyle concepts (live- work-play) prevalent in the major Southeast Asian cities. Some of the upcoming integrated residential developments are Crystal Residences, Golden City, The Gems Garden Condominium, Kantharyar Residences, The Atrium and Thanlyin Star City. Average Selling Price of Newly Launched Units In 1Q 2014 (per sq m) Source: Colliers International Myanmar Unit Mix of Projects Launched in 1Q 2014 (Yangon) Source: Colliers International Myanmar

Colliers International Yangon Myanmar Condominium Market Report 1Q 2014 from Myanmar-Property