5.airinc. yangon location report . feb 2013

The World’s Trusted Source for Workforce Globalization

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SURVEY REPORT YANGON, MYANMAR

FEBRUARY 2013

2The World’s Trusted Source for Workforce Globalization

YANGON, MYANMAR

In the expectation that mobility into Myanmar (formerly Burma) will increase as a result of reforms promoting foreign investment, AIRINC sponsored an onsite survey of Yangon in November of 2012. Located in the south of Myanmar, Yangon was the country’s capital until Myanmar’s military government relocated the political center to Naypidaw in 2006. Yangon is still the commercial center and the main entry point for foreign businesses and investors. While its infrastructure is not as developed as that of other major Southeast Asian cities like Kuala Lumpur or Bangkok, this is changing rapidly as Myanmar opens its doors to foreign businesses and tourists. After fifty years of military rule, political reforms are underway, and in recent months the EU and the USA have loosened economic sanctions. There are now many NGOs in Myanmar, as well as a number of Korean, Japanese, and Chinese businesses.

In November of 2012 a new foreign investment law was created to help with economic growth. This law stipulates that foreign investors no longer need a local partner in order to set up a busi-ness in Myanmar. The law also offers tax incentives to foreign investors. While many terms of the new law are still ambiguous, it is a major step in welcoming investors into the country.

AIRINC SURVEY REPORT YANGON, MYANMAR


INTRODUCTION

With a population of approximately 4.3 million, Yangon is Myanmar’s largest and busiest city. Its central business district (CBD) is located in Kyauktada Township and designed in a grid system. This downtown area at the convergence of the Yangon (Hlaing) and Bago Rivers is home to many abandoned, decaying colonial buildings. The majority of low-income Burmese families live in shop-house style housing blocks found throughout the city. Unlike Hong Kong, Singapore, or Bangkok, Yangon has no skyscrapers. There are a few high-rise hotels, office towers, and condo-miniums in the CBD and in the wealthier neighborhoods to the north.

The city is expanding northward in the direction of Kandawgyi Lake and Inya Lake, and one realtor source predicts that Mayangon Township in the northern part of the city will become the second business district in the future.

The Yangon International Airport is located in the north of the city, about a thirty minute drive from the CBD. There are frequent flights to Yangon via major international airlines. Some nationalities may obtain visas upon arrival, but this option is not available to all, so it is best to obtain a visa before departure for Yangon. Most business travellers to Yangon stay at the Traders Hotel, the Parkroyal Yangon, or the Strand Hotel, all located in the CBD.

Expats are moving north into the city sections referred to as 7, 8, 9, and 10 Mile, which are located about a fifteen minute drive from the airport. Some expats live in the far west section of the city in Pun Hlaing Golf Estate, a residential development separated from the main city by the Yangon River, but bad traffic makes the commute from Pun Hlaing Golf Estate into the CBD so lengthy (more than one hour) that most people are reluctant to move across the river to this area.

Some of the larger and more expensive houses in the area are in Dagon Township, along the roads around Inya Lake, and in Golden Valley in Bahan Township. Many embassies are located in the Dagon area in the northeastern section of the city, halfway between the CBD and the airport.

Survey Report: Yangon, Myanmar


Golden Valley is a five minute drive northeast from the CBD and about thirty minutes from the airport. Inya Lake is about ten minutes north of the CBD.

The tropical climate in Yangon has three distinct seasons. It is warm but pleasant from Novem-ber to February, hot and dry from March to May, and rainy from the end of May to the end of October.

SECURITY

Expatriates can move freely about the city without need for special security arrangements, and in general assault and other violent crime is rare. However, it is common for apartment compounds to have unarmed security guards and for expats to hire guards for their homes to deter burglars. Most guards work at night only, though senior level executives living in quiet side streets around Inya Lake or Dagon might hire guards for both night and day shifts.

GOODS & SERVICES

Myanmar is a cash economy. The Myanmar currency is the Kyat. During the time of the survey, the exchange rate was 852 Kyats to 1 USD.

Most goods and services in Yangon are priced in Kyat, but mid-level to high-end restaurants, major hotels, expatriate rentals, utilities, and communication services for expats are charged in USD. Grocery and convenience stores, food and retail outlets, and taxis accept Kyat only. Almost all day-to-day purchases are made in cash. Credit cards and travellers cheques can be used only in international hotels. Some high-end restaurants list prices in USD but accept Kyat as well, though at an unfavorable rate of exchange.

Money changing can only be done through authorized, government-approved hotels and banks, such as the currency exchange at the International Airport and the local KBZ Bank, which has a branch in Bogyoke Aung Sung Market in the CDB. Moneychangers here are very particular about the condition of bills, so marked or crumpled bills may be rejected. Black market moneychang-ers sometimes approach foreigners outside some of the major hotels; they are best avoided, as some travellers have reported being cheated.

Service charges and government taxes on food and beverages vary from place to place, and some restaurants do not have charges. The service charge at hotels or high-end restaurants is 10%, and government taxes at such establishments are 5%. Tipping is not part of Myanmar cul-ture, but as the tourism industry grows it is becoming more common to “round up” when paying restaurant bills.



FOOD, BEVERAGES, AND TOBACCO

The best expatriate quality supermarket is MarketPlace near Golden Valley, which is owned by the City Mart chain. It is modern, clean, and air-conditioned, and it has an adequate selection of imported items. Most imports come from Asia, as USA and EU trade sanctions have limited imports from North America and Europe. Supplies are always subject to change, and availability is not always consistent. Other good quality supermarkets are Ocean Supercenter and the City Mart chain of supermarkets, but these aren’t of the same standard as MarketPlace. Most items in all three supermarkets are similarly priced.

Alcohol is available at supermarkets, most of which stock international brands of spirits and liquors, though the wine selection is limited. Tobacco (primarily Asian brands) can be purchased at supermarkets and from shops on the streets.

PERSONAL CARE AND HOUSEHOLD SERVICES

Most expats would tend to patronize the Traders Hotel and Inya Lake Resort in-house hair salons that have English-speaking staff.

Options for laundry and dry cleaning are limited. Most expatriates use Shine Laundromat and Dry



Cleaning, a franchise with more than twelve outlets across the city.

CLOTHING

There are no high-end department stores or clothing shops in Yangon with familiar international clothing brands. Most expatriates bring their own clothing or have clothes made to order by af-fordable local tailors.

MEDICAL CARE

There are basic medical and dental facilities in Yangon, but travelling to Singapore or Bangkok is the best option for emergencies or more specialized medical attention. The SOS clinic in Inya Lake Resort is run by a French doctor. It has medivac capabilities and English-speaking staff. Other options for private clinics and hospitals include Asia Pacific Medical Centre, Sakura Medical Centre, and Pun Hlaing International Hospital. Golden Bell Pharmacy was the one recommended pharmacy. Though it is one of the most well stocked pharmacies in the city, it carries mostly unfa-miliar, Asian generic pharmaceuticals.

COMMUNICATION SERVICES

The government has a monopoly on all communication services. Landlines, mobile phones, and Internet in Yangon are very expensive, with installation fees as high as USD900 to activate a landline and SIM cards that cost as much as USD300. The quality of telecommunications and In-ternet is poor and unreliable. EMS International Express Mail Service, operated by Myanmar Post and Telecommunications, and DHL offer international courier services to and from Yangon.

HOME FURNISHINGS AND EQUIPMENT

Yangon has many local furniture stores and small home furnishing and upholstery shops. Small electronics stores can be found throughout the city, but there isn’t a single large department store carrying everything under one roof.

DOMESTIC HELP

It is common for expatriates in Yangon to hire domestic help. Expatriates who live in houses often hire live-in maids. Some households also hire a gardener and a cook who live on the premises. Sometimes the maid doubles as the cook. Families with young children may hire maids who double as nannies. Domestic helpers hired by expatriates usually speak adequate English.

Since there are at present no formal agencies that handle domestic help, hiring is most common-ly done through word of mouth. Other means of finding domestic help are through community services, such as Christian missions, or through local employment agencies. Expats who choose to use a local employment agency will be bound by contracts and service charges.


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TRANSPORTATION

There is no subway system in Yangon. Buses are in poor condition and expats do not generally use them.

Non-Burmese cannot buy or register cars in Yangon, so it is common for companies to hire cars with drivers for their senior staff. Multinational companies and diplomats can get the needed licenses from the government to import needed cars, but a solitary expat cannot. All cars for pur-chase in Yangon are secondhand. Most are imported from Japan. According to realtor sources, mid- to senior-level executives tend to use cars with drivers, while junior executives usually use taxis. Taxis do not have functioning meters, so a price should be agreed upon with the driver prior to the journey.

The major roads in Yangon are in relatively good condition, but because many of the side roads have deep potholes, four-wheel drive cars are the best type of vehicle to use. Because of the increasing number of local car owners and numerous ongoing road construction projects, traffic is heavy, particularly during rush hour. The government is planning to build a number of major overpasses, which are slated for completion by late 2013. The government will also be enlisting the help of urban planners from Singapore to create a better transportation infrastructure.

RECREATION, ENTERTAINMENT & DINING

While there are many cinemas in Yangon, the few that are of expatriate quality tend to screen a limited number of English-language movies. Internet cable TV is available from a local company called Five Network. The basic plan offers twenty-five basic stations, including Fox Movies, Dis-covery, ESPN, and Animal Planet.

All serviced apartments and most of the good quality hotels have in-house gyms that non-resi-dents can join. There are more than half a dozen golf clubs in Yangon. Yemon Island Gold Resort and YCDC City Golf Resort are two that are used by expatriates.

There are many street food vendors in Yangon, but they tend not to be patronized by expatriates due to varying standards for hygiene. Popular mid-level to high-end restaurants that serve good Burmese, Asian, and international cuisine and operate out of standalone buildings or residen-tial properties include Monsoon in the city centre, Green Elephant on Pyay Road, Padonmar in Dagon Township, and Le Planteur on Kaba Aye Pagoda Road. Hotel restaurants are also popular with expats.




HOUSING

Realtor sources liken the Yangon rental market to “the wild west.” Demand here has increased by as much as 50% over the past two years as the number of diplomats, NGOs, and Japanese, Korean, and Chinese expatriates grows. This influx of expats has been pushing up demand for rental properties in a city that did not have a large supply to begin with.

Some wealthy Burmese are investing in property, but availability is low. In August of 2012, the government raised the tax on buying property from 15% to 37% in an attempt to cool the market. As a result, less buying and selling of properties is now occurring and it is expected that more units will enter the rental market over the coming months. Construction of one- to four-bedroom apartments and new villas is underway in full force in several city sections.

Detached houses are the standard house type in Yangon, and emphasis is placed on lot size and the quality and size of the garden. There are also some townhouses located in compounds such as FMI City and Orchid Gardens, which are located across the Yangon River. A typical house has three or four bedrooms. Bathrooms are often smaller than what most western expatriates are accustomed to. Some houses are older and may need renovation, but there are also newer, more modern villas available. Couples and familes with children often rent houses in neighborhoods such as Golden Valley alongside wealthier Burmese. Most houses are unfurnished and come with a garden and a garage. Pools are not common and are found only with bigger properties. Houses in Yangon are surrounded by walls, and the road-facing walls are often fringed with barbed wire. Expats renting houses also pay for gas, water, electricity, and generator fuel, as well as for pest extermination, which is needed once a month in the dry season and twice a month in the wet season.

Power outages are common in Yangon, so houses need backup generators. Some houses are rented with backup generators and some are not. If a rental property does not already have a backup generator, an expat can either purchase one or ask the landlord to install one in return for an increased rental price.

Some areas are affected by power surges, so it is advisable to protect expensive electrical appli-ances with transformers or stabilizers. Tap water is not potable, so bottled water must be pur-chased for drinking and cooking. LPG cooking gas can be purchased and refilled by local suppliers.




Expatriate quality apartments can also be found in various sections of the 7, 8, and 9 Mile areas. Utilities for apartments are generally paid separately. At present there aren’t as many apartments as there are houses and serviced apartments on the market, but developers have started building more of these recently.

While it is not usual for most Asian cities, common practice in Yangon is for both the tenant and the landlord to pay the real estate agent a month’s rent when signing a tenancy agreement. Ex-pats pay rent in U.S. Dollars, and most landlords ask for six months’ to one year’s rent up front.

Serviced apartments are located in Bahan Township (Golden Hills) and Mayangone Town-ship (Micasa and Marina), which are downtown. Gas, water, electricity, and sometimes wifi and basic cable are included in the rent for serviced apartments. Serviced apartment buildings may also have pools, gyms, security guards, and restaurants on the premises. There is very limited availability for serviced apartments. At the time of this report, there are fewer than 750 units in Yangon, and they are all occupied with long waiting lists.

There are many new residential developments being built, so more units will be available within the next two years. Barring any significant increase in the number of international assignees, this increase in the housing supply is expected to stabilize the rental market.

5.airinc. yangon location report . feb 2013

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