Cyrus Pun is excited about the prospects for his company’s new real estate development in Yangon.
As Head of Real Estate and Executive Director of YOMA Strategic Holdings Limited, Cyrus Pun says Myanmar’s real estate market is young. But judging by the quality of the property Lotus Hill that his company is rolling out, he’s setting the bar high right out of the gate.
Luxury development Lotus Hill is strategically placed within the grounds of the expansive Pun Hlaing Estate in Yangon.
Walking through the quiet, landscaped development of luxury homes it is easy to forget you are in Myanmar’s busiest city, the country’s commercial hub.
The YOMA real estate executive says the real estate sector makes up a large part of YOMA’s revenues and profits. YOMA is a regional player and is listed on the Singapore Stock Exchange doing business in real estate, food and beverage, automotives, agriculture and tourism, plus others.
Cyrus Pun is proud of the new Lotus Hill development that will take up nine acres on the Pun Hlaing Estate, located along the scenic Hlaing River to the west of Yangon. The development consists of about 70 luxury “triplex” units.
Cyrus Pun took time out to speak with Mizzima’s Aung Thura about YOMA’s Lotus Hill development and company’s perspective view on the Myanmar real estate sector.
Aung Thura: You are rolling out the Lotus Hill development. Are you excited, happy or both?
Cyrus: I am very excited. It is a new launch for new products. For us, some of them we have planned for long time, and they are products that will feel very strongly and passionately about, and that is because we have gone through a long process of going outside starting other related projects in overseas markets. We brought the design and concept into Myanmar and then making sure that we fixed this into the Myanmar context and we shifted to Myanmar taste and culture. So we are happy about that and we are excited to put it onto the Myanmar market to show the people too.
What is the basic concept behind the Lotus Hill development?
It is what we call the Town-House concept. The Town-House concept means houses together. The benefit of that is you have a slightly small area of land, then you can build a house on it. So, there is a much more efficient use of land. For the buyers, that means that the price will be lower instead of buying a much bigger piece of land where the house is put on it, and they can still enjoy it like a big house with a garden and roof at the top.
The other point is the area that Lotus Hill is built on is elevated. Lotus Hill is a Town-House development where a house is built on three levels. So you have a ground floor where you have a kitchen and the entertainment space meaning the dining, the living room. If you invite the guests to come, it is a great place to gather to have dinner, to sit and talk. And the garden is next to that, and it is stretching out, and some of the gardens will have a beautiful lake view, some with a landscape view. The upper two floors will be the bedrooms and there is also a rooftop garden, so the family rooms at the very top two floors. That place will give you a fantastic view of the golf course, then you will see Yangon beyond the golf course. The higher you are, the further you will be able to see.
What are the prices of the cheaper properties?
Cyrus: Well, if you compare the prices of Lotus Hill to the prices of other villas (on larger areas of land), the lower units for Lotus Hill are about US$620,000. We know that for some villas in Pun Hlaing, it is a cheap price. We have seen the others from US$1.3 million to US$3 million. So there is a good difference.
What is the difference between the lower and higher priced properties in the Lotus Hill development?
As I said, the lower units are about US$620,000 and the expensive ones are over US$700,000. And some units come with a bigger plot of land and some units have a better view, so the buyers can choose what they want, depending on how much they want to spend.
Given your company’s Southeast Asia regional operations, is this development modeled on a particular development in the region, for example in Singapore or Malaysia?
Well, I will actually agree that this project has the benefit of being in the very established development in Pun Hlaing. Even if you are going to Singapore, you will be very hard pressed to find the products of this quality and thus, it is only in the very, very prestigious and primary and those house prices are fifty times higher than what we sell here. Because we have the benefit of space here, we can also put in a lot of facilities as well as a lake that people can enjoy. Those type of things mean you would have to be very wealthy to finance (a property like this in) Singapore. In terms of the quality, the quality of the products itself and its design and the construction it is very international.
You personally have experience in working in real esate in Hong Kong and China. How does Myanmar differ?
Myanmar real estate is still in its early stage, so a lot of things still need to change and the market is young. First of all, if you look at the residential market, it is found that the market develops for only the really top few percentage of the population and they can be able to afford to buy. I think as time goes on, people will become wealthier, there will be more businesses in Myanmar and you will have a bigger middle class and working professional class. As you get more money and you can spend on buying apartments as well and also another market you may have more bank facilities to buy a home.
Until today, there have been difficulties in people being able to buy property. As I said actually, sometimes buying a home is about a sense of price, a sense of security. For many people, buying a home is a dream, so we would like to able to make sure that many people can reach that dream as possible.
You say the market is in the early stage?
First of all, I think the regulations are just coming in and people and the developers are getting to understand the regulations. (These regulations specify what can built and what can be built on.) The land price in the past few years has been very high. Now there are more clear regulations and the government is also spending a lot of attention to try and get the buildings and the development strategy right for Yangon. These things obviously influence the developers to build. I think there will be a gradual improvement in the way construction companies and the developers build in Yangon. That would be very effective in the market.
Now the country has a new government. How do you think the authorities could improve the situation to further facilitate the development of the real estate sector in terms of rules and regulations?
Well, first of all, the government is able to make it more transparent and provide a clear understanding to have procedures as well as to make sure that people understand and follow it, so that means more transparency, that means more dialogue between the government and the public and the developers. So, public consultation is also very important, gathering people’s opinions. When they build rules, it needs to be conveyed properly to the developers, so the developers understand how to follow those rules as well. And for the building of rules, you need to get the opinions from different people, the business idea is important because business also gives us a reality check on how they see the development to be. If you create rules that do not work for businesses and no one will build, that is not a good idea.
At the same time, you need to create rules that are fair and the general public in Yangon will benefit from. That is also very important. A lot of dialogue, transparency, these are the critical things. On top of that, I will also point out that cooperation between different government departments and ministries is fundamental to having a healthy environment for Yangon and Myanmar as a whole. In many cases, development is to do with many different functions in the government. It is not one ministry or one department. It is a collaboration between very different people.
So are you optimistic about the investment flowing into the real estate sector?
I am optimistic about that because when I speak to investors from overseas, there are many interested in Myanmar. They see us as a great growth potential for Myanmar because of the lack of supply in the real estate, especially in the commercial areas, and the retail sector. Now many new hotels are coming up. We still see in the longer term that Yangon will need more hotels because Yangon is a very good tourist destination. It is same with the offices too, even though many offices are now being built. We are not able to satisfy the demand of Yangon due to the economy opening up. Now we see more foreign companies are coming in and local companies are also growing with that. So I think many people will see it as a golden land of opportunity too. Certain things need to pave the way for more investments to come in, although we have already seen a lot of investment coming in, but I think the level of investment will be more in the future.
How do you view the overall real estate market in Myanmar?
I think the size of the real estate sector will grow along with the economy. I think the prices will gradually rise and right now they’re stabilizing, but the size of the whole market will grow very much because, as I said before, the market right now is still closed to most of the people in Yangon, Myanmar. The market depends on the rich only. Sooner or later, everyone wants to own a home, so a much bigger part of the market has not been touched yet. When they become wealthier, they will be able to afford to buy and the developers and banks can give them assistance to buy, then the market will expend very quickly. So the potential is a lot bigger than we are seeing now.
So there is potential for developers or the community?
It is for both. I think you need someone to supply a home, you need someone or other people want to buy a home as well, so it is the matching of needs.
How do you view the impact of Yoma’s real estate development projects?
Right now, real estate still constitutes a large part of Yoma Strategic Holdings Limited’s overall portfolio in terms of revenues and profits, and also this is the main pillar of Yoma Strategic Holdings Limited. We have a plan for the next five years, until 2020. We want the number of properties in real estate to be the biggest out of the real estate sector. Of course, real estate will keep on growing. We want the rest of the businesses to grow more quickly than real estate, so that they will be equal by 2020.
We are also doing very well in some of the other businesses. We will make a lot of investments in some of our very promising business that seem today very small but tomorrow those will be bigger than now. So KFC is doing very well and we have an investment company in a tire company doing very well and it is growing rapidly and our car business is only really just started in the last couple of years. We see very good potential there too. We see these as the engines of growth for Yoma Strategic Holdings Limited.