There are, as we all know, loads of foreign buyers snapping up property in Britain. Most of London, according to the headlines at least, is owned by a super-rich cabal of Russian, Middle Eastern, Chinese etc investors. But you don’t often here about Myanmar.
And yet Knight Frank’s latest Wealth Report suggests that buyers from the nation-formerly-known-as-Burma accounted for just shy of 1% of all £2m+ properties bought in the UK in the 12 months to April 2013. That’s in the same range as buyers from Switzerland and Hong Kong, who get far more column inches.
“The Golden Land” is in the process of shaking off a resolutely shocking human rights record and opening up to the rest of the world. A year after the military Junta was dissolved, and despite visits from President Obama and Tony Blair last year, there are still some tough questions about just how far that human rights record has come, with rumours of ethnic cleansing in the West of the country circulating as recently as April this year. But international economic and military sanctions have been eased or removed over the last couple of years, and now it looks like the UK’s property industry is going in gung ho.
Colliers has set up an office in Yangon, breaking ground for international property firms in Myanmar, and London-based property advisor LondonDom is in the process of opening an affiliated office in Yangon, with MD George Shishkovsky heading over there in early July to talk-the-talk face-to-face with potential Burmese clients. The firm has a decent track record in tapping overseas markets, having marketed prime central London properties to buyers in Russia, Kazakhstan and Uzbekistan since 2004.
George Shishkovsky, Managing Director of LondonDom: “In the 1950’s Burma was seen as one of the Asian economies with the most potential. But then due to the military regime, for over 50 years Myanmar has been a closed economy. The suspension of international sanctions and improved relations with the West have opened up amazing opportunities after years of economic isolation. Burma is abundant with natural resources, is a country slightly bigger than France with a population of 60 million, and enjoys a strategic location. Until now it has been mainly restricted to doing business with China and India because they were not bound by international sanctions. It’s all about to change now!”
Tony Picon, Managing Director for Colliers International Myanmar: “We are bullish about the prospects for those who wish to be part of the Myanmar growth story. Yet, similar to any frontier market, everybody must be prepared for some difficulties when they start to operate here.”
Piers Brunner, Chief Executive Officer for Asia at Colliers International: “Colliers is the first international real estate services firm to enter the Myanmar real estate market. We see huge potential in the country – with many of our clients seeking new opportunities in what is, arguably, the last major frontier market in the region. It is important for us to have the operation in place to assist our clients, as they expand their business or real estate portfolio in Myanmar.”
The Asian Development Bank estimates that Myanmar, on its current development path, can grow by up to 8% annually over the next 20 years, and super-rich research house Wealth-X forecasts that Myanmar will see a major leap in HNWI numbers in the coming years. There are currently fewer than 40 HNWIs in the country, but Wealth-X and Knight Frank predict that the number will rise by 687% to 307 by 2022 thanks to the opening up of the nation’s economy; the biggest increase in the number of HNWIs of any country. These changes would put Myanmar firmly in the middle-income bracket of world nations based on per capita GDP, with a higher number of resident HNWIs than Kazakhstan.
Mykolas D. Rambus, CEO of Wealth-X: “Foreign firms are establishing a presence in Myanmar and opportunities to develop infrastructure, energy, international banking, and education should enable private enterprises to work with the government to develop the country.”
Marc von Grundherr of Benham Reeves Residential Lettings has, however, been dealing with Burmese investors in London for a good few years, and is – despite a recent noticeable uplift of interest – cautious about the prospects of a sudden influx of Myanmar money into the UK: “The problem is clients from this region are like Thailand and incredibly cautious and trust has to be built over a long period… I am not sure there is a burgeoning Burmese market in London, but I have certainly had increased enquiries from existing clients introducing friends/colleagues looking to invest and wanting advice on where is best.
“Certainly our enquiry levels for advice have increased dramatically from new Burmese clients. In addition to the normal requirements (ie. what yield they can achieve) they place great importance on capital preservation; while we do not actually handle sales we are being asked for an unusually high level of information on where we think the market will go in these areas. Our enquiries have been for investment and none for owner occupied.”
LondonDom’s Myanmar operation will be targeting wealthy buyers looking for homes in Blighty as well as investment properties; Shishkovsky: “Our initial market research shows that there is a roughly 50/50 split in interest between new build and period properties with budgets between £500.000 and £2,500,000. Some are interested in family houses outside of central London. Education in the UK is a big magnet to wealthy Burmese. Lots of them have strong links with Britain since colonial times.”
If you happen to be in Yangon, Myanmar anytime soon, look up LondonDom at:
No 52 (Ground Floor) 3rd Street
Tel: 09 503 4146