Ayala Land enters booming Myanmar property market
MANILA, Philippines–Local property giant Ayala Land Inc. is breaking into Myanmar (Burma) booming property market in partnership with City Mart Holdings, the leading local retailer there, as part of its road map for Southeast Asian expansion.
Paolo Borromeo, head of corporate strategy and development group at ALI’s parent conglomerate Ayala Corp., said in a recent briefing that the group had identified concrete projects but has yet to finalize details in terms of contribution to the partnership.
In Myanmar as well as in Vietnam, the group was looking at mixed-use developments but noted that these would still be very small compared to ALI’s existing businesses.
City Mart Holdings operates multiple retail formats in Myanmar, including supermarkets, bakeries, cafes, pharmacies, baby accessories and convenience stores. The group’s founder and manager director, Tint Win Win, also founded the Pahtama Group in 1997, the leading and fastest-growing distributor of consumer products in Myanmar.
Tint, tagged by the media as Myanmar “supermarket queen,” was in town in May during the World Economic Forum on East Asia 2014 hosted by the Philippines.
“What City Mart wants to do is they have properties they want to develop,” Borromeo said, adding that the partnership would start with projects in the capital city of Yangon.
“For us, one of the big learnings in going abroad is the importance of partnership especially in countries we know nothing about. So in those places, we have what we believe are very strong partners,” Borromeo said.
The partnership with City Mart also increases the Ayala group’s presence in Myanmar, which has been in the global spotlight in the past few years since coming out of five decades of economic and political isolation. As Myanmar is seen as the “last frontier” in Southeast Asia—which is set to integrate into a single economic community starting 2015—property prices and rental rates in that country has skyrocketed in recent years as land and building supply could not cope with demand.
Given this shortfall in real estate space especially for the bandwagon of foreign investors interested in Myanmar, property development is thus seen by Ayala as a window of opportunity to expand its presence there.
Earlier, another operating unit, Manila Water Co., entered into a joint project with Mitsubishi Corp. of Japan and the Yangon City Development Council for a non-revenue reduction program in Myanmar.
Borromeo said he could not talk yet about the details of the upcoming projects.
“At this level, we have identified countries where we feel can expand as a group and we’ll use water and real estate as our beachfront,” Borromeo said. Apart from Myanmar, Ayala is keen on expanding to Vietnam and Indonesia.
“Our strategy is different. We have to be more patient when it comes to international businesses so we’ll take the opportunities as they come,” he said.
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