Friday, September 22, 2017

Hopes rise for new foreign investment in construction

Long-absent overseas investors are poised to re-enter the Myanmar property market following the elections scheduled for 2010, industry sources say.

Following a brief boomlet in the 1990s, foreign investors have stayed out of the Myanmar market. But they have been keeping a watchful eye on the developing situation here, ready to return at the right moment, sources say.

“We’ve met with some investors from Hong Kong, Malaysia and Thailand, who were asking how to invest in our construction sector. They are in a wait-and-see mode, but the potential is there,” said Dr Maung Maung Lay, general secretary of Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI).

He said the global recession had crimped the construction sector, not only in Myanmar but through-out the world. Most construction companies face financial problems in completing their projects on-target.

“Mostly, construction companies are facing slowdown in other countries as well as here. Although there is investor interest, the financial problems make them dizzy. So they are waiting to see how policy in this sector is going to change. So far as I know, only 3pc of foreign investment goes to construction – most of it is manufacturing,” he said.

Developer U Ko Ko Htway said foreign construction companies started getting into the Myanmar market in about 1990, but it never really amounted to a boom.

“After the government named 1996 as Visit Myanmar Year, foreign companies got involved in construction, especially in hotel projects – Traders, Sedona, Summit Parkview, Mi Casa and so on. But after 2000, no new companies have been coming in,” he said.

U Ko Ko Htway said he thought that if the country’s economy improved, construction could be the most profitable sector. Following the 2010 elections, developers are hoping for a building boom.

“It looks like the most interested investors are in Japan, Malaysia, Thailand, Singapore and China, as they were up until 2000,” said U Ko Ko Htway.

Dr Maung Maung Lay said he thought a construction boom would require changes to be made to the country’s banking system.

According to Central Statistical Organisation figures, no new foreign investors have come into the construction sector since 2004-2005.