Burma on my Mind
Category: Newspaper / Magazine Columns
Being politically correct is not exactly my strong suit, as anyone who knows me would willingly say.
"Shoot now, pay later and damn the consequences" could be a suitable epilogue for a day in my life.
Today's article is about to take us over the border to the country of Myanmar or Burma. Frankly speaking, Burma is firmly etched in my mind scape. Is this just a colonial overtone, sign of age, or have I been living here too long? For clarity and because "B"s are easier to type than "M"s I'm opting for Burma at the moment.
But let's face it; the name game is just one of the many contradictions this emerging country faces.
History has been made this past week as Aung San Suu Kyi and her prodemocracy party has swept the elections like an overly efficient "dust buster".
Which brings us to two "P"s - politics and property. Do we dare utter these two words in the same sentence? A few weeks ago I headed up to Bangkok to attend a seminar, held by The Nation, Colliers International Thailand and Universal Link Services, on the opportunities and challenges facing Burma.
For a Friday morning, the turnout of over 200 well-dressed businesspeople, made me wish I had worn one of my A-list black t-shirts rather than the everyday island variety but the number demonstrated the rising buzz and sentiment surrounding Burma.
I've been in Asia for nearly three decades and seen emerging nations both roll out and roll up their red carpets and democracies emerging in Indonesia and the Philippines after years of muscled one man rule. Then of course there's the curious case of the communists: China and Vietnam.
I've seen all manner of mayhem, from bicycles to Bentleys, and agriculture to iPads, in the march towards capitalism. Certainly there still remain works in progress such as Cambodia, Laos or Sri Lanka.
But it's Burma that now has the region's ears, after some fifty years of isolation and confusion.
Comparing changeovers in other South East Asian nations, where coups and conflict have erupted in the past (Thailand take note), historically the military controlled countries have only seen transitions between powerful generals.
In terms of property opportunities, at present foreigners in Burma are restricted to a lease or rental term of 30 years. There is a renewal provision for two 15 year terms, subject to approval. This was highlighted by Collier's Tony Picon at the seminar. The new investment law is expected to roll out soon which will provide reforms for foreign ownership, fast-tracked approvals and tax and employment provisions.
Tony and Colliers are perhaps the most significant resources at the moment on real estate trends in the Burma market and have published some excellent market research.
Some market quirks came up in the session, such as the distinction between what are referred to as "condos" and "apartments" in the local context.
Legally, there are no condos but locals refer to "condos" as structures that have elevators and other multistoried walk up units as "apartments". Bizarrely, ground floor units have the highest selling prices and rates decline as you go upward, unlike the opposite trend in most cities. This is due to the fact that high floor units require an elevator and these rarely work in the mechanically challenged current environment.
Office and commercial rates are in key demand with pricing expected to push up to US$ 50 per square meter and ultimately could rise above US$ 100. Many NGOs and representative offices have traditionally been housed in hotels where low occupancy attracted rental by any means.
Now, average room rates are skyrocketing and hotel room demand is unable to cope with the limited supply.
Looking forward, the natural synergies of Burma with key neighbors such as India, China and Thailand tend to favor the latter.
Overland access favors this country with early projects, such as the Dawei Special Economic Z one that is being undertaken by Italthai, being fast-tracked.
Tourism of course will come but for now the natural resource-rich country, which counts timber, gas, petroleum, gold and copper amongst its many assets, is on the radar screens of the world's heavy industrial hitters.
What is clear for any observer is this country is headed in only one direction at the moment, which is up.