Myanmar Becoming a New Investment Frontier

Myanmar Real Estate Market to Take Off According to Igor Purlantov


As investors continue scanning the globe for new frontier markets to earn large returns, Myanmar is quickly becoming an investment destination of choice. Myanmar, formerly known as Burma, is a Southeast Asian nation that finds itself tucked between powerhouses India and China, tow of the superstars of the now well known Bric Group (along with Brazil and Russia). With a population of 55 million people, Myanmar has large real estate development potential that is just beginning to be tapped. Myanmar as an investment opportunity is something  very recent, with the formation of a new government in March 2011 putting the country on the radar by investors worldwide. The new government led by Thein Sein has already taken positive steps toward permanent stability with the release of Aung San Suu Kyi, the leader of The National League for Democracy, from house arrest in November 2010. According to Igor Purlantov, the country has seen many other positive reforms inkling the easing of painful sanctions and parliamentary elections.

With investors eagerly looking for growth in frontier emerging markets, particularly as growth continues to slow in the United States and Europe, Myanmar promises a new exciting opportunity. The nation has been through many years of economic isolation as a result of continuous western sanctions. With Myanmar now open for business, there is a wealth of opportunity for those willing to do their due diligence and accept a certain level of political risk. Unfortunately, years of isolation has led to very limited means of entering intro financial opportunities in Myanmar. According to Igor Purlantov, many investors, particularly from Asia, have found the quickest route into Myanmar through Singapore. Several small to medium players from Singapore have already found a way into this new and exciting market, including Yoma Strategic Holdings.

As is often the case in new frontier markets, early investors tend to first take a dip in real estate opportunities before taking the plunge into other investment opportunities. Yoma’s primary assets in Myanmar consist of development rights lose to downtown Rangoon. Yoma also has plans for a 70% interest in developing Star City, a new $73 million residential and commercial area to be a special economic zone to attract further foreign direct investment (FDI). A primary driving force behind developments such as Star City is the interest by foreign investors to enter Myanmar and help the nation make up for the many years of sanctions that have left the area ripe for new development. Analysts are quick to note that it is only a matter of time before all western sanctions are permanently drooped which should further drive FDI and growth, says Igor Purlantov.

Assuming the current political situation in Myanmar remains stable and there is calm amongst the multiple ethic groups along the border regions, economic growth should be impressive with real estate prices projected to gain 15% annually through 2015. For experienced investors that understand frontier markets, Myanmar provides a new and exciting investment opportunity, particularly in real estate development. For those investors that are keen to invest in equity markets, there are plans for establishing a new Myanmar stock exchange by 2015, bringing in further capital and liquidity. As time goes by and Myanmar continues down the party of political stability, patient investors will find more promising opportunities, while earlier players will find larger returns, says Igor Purlantov. With powerhouse economic jewels such as India and China next door, it is only a matter of time before Myanmar gets its chance to shine on the economic world stage.