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Myanmar hotel sector to soar

MYANMAR — The hotel sector in rapidly-emerging Myanmar will continue to be supported by strong growth in the number of visitors to Yangon as a result of accelerated foreign investment, the boom in leisure tourism, as well as a lack of quality apartments.

Myanmar is similar to Thailand 30 years ago in terms of tourism development, and even if it achieves only a fraction of the latter’s success, it is still set to experience explosive growth. Hotel room rates will remain very high because new projects being announced will take several years to hit the market.

The most anticipated new hotel opening this year is the Novotel along Pyay Road, a joint venture between Max Myanmar and Accor.

Although there are several large, mixed-use projects that have commenced construction, they will not be completed until 2016 to 2017 and the expected strong growth in the number of visitors to Yangon will easily soak up all of the new completions.

A successful completion of the much-anticipated elections next year could herald a sharp acceleration of foreign direct investment, and a surge of foreign professionals and business visitors is expected as more projects become established.

Meanwhile, leisure tourism is expected to maintain its strong upward momentum. Leisure tourism increased at a compounded annual growth rate of 34 per cent since Myanmar opened up in 2010. As tourism infrastructure improves amid co-ordinated efforts by the government and private sector, tourist arrivals are expected to grow at a CAGR of 25 per cent from 2013 to 2020 as a base case.

Thanks to this heavy demand, hotel room rates will remain high in the near-to-medium term. A lack of quality apartments for rent also supports high hotel room rates. Business visitors are likely to stay longer as their exploratory trips evolve into material business development and this will provide an added boost to hotel demand.

In addition, the setting of an official room rate ceiling of US$150 (S$190)has failed to dent rates, with a standard room in a four-to-five-star hotel averaging about US$200 a night. Little effort has been made to enforce these rules, which are in any case almost unenforceable. Should the government push towards heavily regulating the industry, the hotels will simply drive their costs underground and visitors may be charged indirectly via payments for ancillary services.


Mr Shine Zaw Aung is Head of Research at Singapore-based corporate finance firm New Crossroads Asia while Mr Tan Kok Keong is Chief Executive of Singapore-based property consultancy REMS Advisors.
Is the Yoma story losing steam? Tongue

(not vested)

Yoma Strategic posts 44.9% fall in 4Q earnings to $6.4 mil

Yoma Strategic, the Myanmar-focused property developer, posted a 44.9% fall in earnings to $6.4 million for the 4QFY2013 ended March, down from $11.5 million a year ago.

Correspondingly, earnings per share fell to 0.55 cent from 1 cent.

The decrease in earnings come despite a 34.4% increase in revenue to $27.5 million, supported by sales of residences and land development rights.

Yoma said this was due to a higher other income as well as a higher share of profit by non-controlling interests in the previous 4Q.

Full-year net profit rose 13.5% to a record $16.4 million on the back of a 66.2% increase in revenue to a record of $100.5 million.

No dividend was declared for the full year.

Yoma 1-for-3 rights issue to fund more acquisitions
Increase of land bank among moves to boost diverse Myanmar portfolio

Work in progress: Yoma Strategic has started the redevelopment of the former Burma Railway Headquarters into Yangon's leading luxury hotel
YOMA Strategic Holdings, which has a diverse Myanmar portfolio, has announced additional acquisitions which it will fund through a proposed one-for-three rights issue of up to 430.7 million shares at S$0.38 per unit.
The issue price of S$0.38 represents a discount of 46.5 per cent to Tuesday's closing price of S$0.71 and 39.6 per cent to the theoretical ex-rights trading price of S$0.63.
The proposed rights issue is expected to raise S$163.9 million, which will be used to pay for the acquisitions. The shortfall of approximately S$0.8 million will be funded from the company's internal resources.
The group proposed to increase its land bank by about 43.3 acres for new residential and commercial developments at its flagship Pun Hlaing Golf Estate (PHGE).
Steep decline...any reason?

Sent from my S4 via Tapatalk
Myanmar protests so "investors" gravitating towards the rights price?
(11-03-2015, 01:06 PM)specuvestor Wrote: [ -> ]Myanmar protests so "investors" gravitating towards the rights price?

Yes, I concur.

Myanmar is really full of uncertainties ahead.
I am puzzled to its recent drop too.

2 possible reasons I can think of.

- election is due this year... what if the army decide that they are not ready to go to the polls and postpone it... or worst, go ahead with the polls, lose, get embarrassed and start to roll out the tanks on the streets?

- overheard from a friend who goes there frequently, that the property mkt has gone from red hot (and overvalued) to.... stale
For FY2015 results, revenue and profits up year on year but attributed to several one off gains. The coming year presents some challenges for the company but at current prices, valuations seem low. Prices in the short term might continue to be suppressed but long term prospects for the company in the Myanmar market still seem good.
Price weakened likely due to the discovery of killing fields..
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