The CLMV countries (Cambodia, Laos, Vietnam, and Myanmar) are recognized as markets with high growth potential, particularly Cambodia and Myanmar, two emerging markets that are gaining attention. These countries are experiencing rapid growth due to open investment policies, presenting significant business opportunities for Thai real estate investors to penetrate these markets.

Mr. Carlo Adrian Pobre, Deputy Managing Director of Colliers International Myanmar, stated that the Myanmar government is currently in a phase of economic development, with a growth rate of 6.8% last year, low unemployment, and stable inflation. This aligns with a workforce population, leading to strong growth in the manufacturing and real estate sectors in Myanmar, which is averaging a growth rate of 7.2% per year and is expected to increase to 10.37% in 2020, with a projected value of $13.5 billion.

In the office rental sector, over the past two years, Yangon has about 356,089 square meters of office space with an absorption rate of 27,800 square meters. However, this is still insufficient to meet the additional demand of 31,814 square meters, resulting in a shortage of office rentals in Myanmar. Consequently, the average rental price for prime office buildings in Yangon is $41 per square meter, which is quite high compared to Grade A office rentals in Thailand.

In the residential sector, such as condominiums or serviced apartments in Yangon, there is only a slight difference, with condominiums having passenger elevators while serviced apartments do not. However, the pricing is entirely different from Thailand, as the supply of condominiums and serviced apartments in Yangon is still lower than demand, leading to high prices for both purchase and rent.

It has been found that people here prefer to live in mid-range serviced apartments that do not need to be overly luxurious but focus on 1-2 bedroom units that are spacious enough for living. In the past, rental prices averaged between $3,500 and $4,500 per month, with the lowest studio rental at $2,000 per month, primarily occupied by expatriates or investors working in Myanmar.

Last year, the total number of condominiums in Yangon was 6,673 units, with an additional demand of 1,765 units. However, only 491 new units were launched for sale. The popular condominium segment in Yangon is the upper-mid range, priced around $245,371, averaging $1,639 per square meter, and the high-end segment priced around $484,414, averaging $3,022 per square meter.

Currently, the hotel business in Yangon has several leading 4-5 star hotels, such as Rosewood Yangon, Okura, Sheraton, and Yoma Central, catering to both tourists and business travelers visiting Yangon for 1-3 days for business meetings and leisure. It is believed that the existing hotels are sufficient to meet customer demand, and there is no immediate need for expansion.

It is evident that there are various investment opportunities in the mid-range real estate sector in Myanmar, especially in residential and office buildings, which still have high demand due to the ongoing development of the country. This presents a significant opportunity for Thai investors to invest and develop businesses in Myanmar and expand their market by introducing products to new markets. Additionally, there is potential to expand real estate investments in Thailand targeting business professionals, affluent individuals, and Myanmar investors coming to study or conduct business in Thailand.

 

Cambodia: A New Market Worth Investing in Real Estate

Regarding investment in Cambodia, Mr. Chia Kin, CEO of Heng Asia, a modern trade construction materials business in Cambodia, commented on the attractiveness of the market, stating that Cambodia's economy and growth are continuously expanding. It is expected that in 2019, Cambodia's GDP will grow by over 6.8%, with the construction industry experiencing significant growth, with project construction values increasing by over 22%, approximately $6.4 billion.

This is evident from the rapid increase in construction projects, including shopping malls such as Aeon Mall branches 2-3, Makro, and Global House in Phnom Penh, as well as several leading hotel brands and restaurants opening numerous branches. In the office sector, there are currently joint ventures with companies from China and Japan, leading to various investment projects such as Lion City, Diamond Island, One Park, China Investor – R&F City, Chip Mong Land Local Investor, and Orkide Villa.

The rapid growth of Cambodia is partly due to the One Belt One Road initiative, which has led to the development of transportation systems connecting with other countries in the region, as well as the development of ports, airports, and Cambodia's free trade agreements, allowing the use of multiple currencies. There are 38 institutions and 67 microfinance companies, and the diversity of development and the multilingual population have contributed to Cambodia's rapid development.

With the attractiveness of Cambodia and Myanmar as emerging markets to watch, especially for Thai entrepreneurs looking to enter these latest markets, ICWEX Co., Ltd., a subsidiary of Index Creative Village Public Company Limited, has partnered with Prop2morrow Co., Ltd. to organize the "Cambodia Architect & Decor 2019" event, the 14th edition, at the Diamond Island Exhibition and Convention Center in Phnom Penh, Cambodia, from June 6-8, 2019. In Myanmar, the 6th edition of the "Myanmar Build & Decor 2019" event will be held at the Myanmar Expo in Yangon from October 3-5 this year.

 

 

This event will showcase products focused on design, decoration, and innovation, allowing Thai entrepreneurs to present the latest innovations and expand their market by matching business needs with consumer lifestyle demands that emphasize quality, advancing the construction industry in Cambodia and Myanmar. Additionally, Thai real estate projects that have been developed, including luxurious and modern amenities as well as public utilities, will attract neighboring investors. The event will feature the Prop2morrow Pavilion showcasing leading Thai real estate projects to target high purchasing power investors to buy Thai real estate and increase sales.

For this event, the company aims to have approximately 100 participating companies in Cambodia, generating an estimated value of 150 million baht, with an expected attendance of around 4,500-5,000 people. In Myanmar, the event is expected to generate approximately 200 million baht, with around 70 brands participating and an anticipated attendance of about 5,000-5,500 people.