New solution for starting up businesses in Yangon

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Exif_JPEG_PICTUREAlthough changes are taking pace, Myanmar still lacks many things to conduct businesses in a way international business people expect.

Hotel rates are high in light of the quality you get. Finding a furnished apartment with hot water shower and proper security control is not easy unless you are ready to pay $5,000 per month and stay in one of the serviced apartments in city center.

The same applies to offices. There are only two or three office towers in Yangon’s central business district (CBD). They are well-seasoned since completion in 1999-2000, or refurbished after being abandoned for more than 10 years (mind you Myanmar does have earthquakes). The first surprise to most business professionals starting-up businesses in Yangon must be the office rent.

At Sakura Tower, the highest quality office building in the heart of Yangon CBD, monthly rent is hitting $100 per square meter. Other CBD offices are a bit cheaper, but is around $75 per square meter, even with a centralised air-con which is switched-off at night while international business people are still working.

There is only one simple reason – scarcity. New developments are ongoing with rumors to be completed in 2-3 years, but given the speed of construction works and complexity in real estate regulations (foreigners are prohibited to own real estate titles), it might be too optimistic to believe the new supply would cool-down the rental market in a few years to come.

In response to rising costs of keeping CBD offices, many international companies moved to the outskirts of Yangon city and leased large houses as their offices. But the effectiveness of that strategy is doubtful, as internet connections are more difficult than in CBD, and buying a back-up generator preparing for daily black-outs especially during the dry season of a year, is costly. Moreover, as the government control on car imports have been eased and construction of a flyover bridge is underway, traffic conditions during office hours are getting worse and worse. Commuting time between outskirt offices and CBD is now unpredictable when streets are jammed with cars.

A new solution is offered by a duo of an American and a Japanese businessmen with long track records in financial services and business developments in Asia. The Sakura Myanmar Business Center (‘SMBC’) commenced operations from June 2013 at the 15th floor of Sakura Tower.

SMBC is a serviced office with bilingual secretarial services, high-speed Internet and meeting facilities and offers three types of memberships for international companies or individuals starting their businesses or investments in Myanmar.

These types are Private Suites, a monthly rental of furnished private units with floor areas of 9-12 square meters. Membership Shared Offices are low-cost office solutions for regular travelers to Yangon. And Virtual Offices are suitable for customers who only need a business address and mailbox services.

Bradley E. Smith, a SMBC Partner and ex-Wall Street investment banker, states, ‘Everything is backward in Yangon. Customers have no other choices but accept what is offered. We started from our ‘wish-list’ of what we would expect to have when starting-up our business in Yangon; and negotiated a space with the best Shwedagon Pagoda view and infrastructure such as high-speed internet, back-up generators, and 24/7 security. Sakura Tower rental may not be the cheapest in Yangon but we offer a  global-standard serviced office with a truly bilingual environment. When our members stay at SMBC from morning to night, they will not feel they are in Myanmar at all. Quality matters’.

(Takuya Matsubara is an Inside Investor contributor. The opinions expressed are his own.)

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Reading Time: 3 minutes

Although changes are taking pace, Myanmar still lacks many things to conduct businesses in a way international business people expect.

Reading Time: 3 minutes

Exif_JPEG_PICTUREAlthough changes are taking pace, Myanmar still lacks many things to conduct businesses in a way international business people expect.

Hotel rates are high in light of the quality you get. Finding a furnished apartment with hot water shower and proper security control is not easy unless you are ready to pay $5,000 per month and stay in one of the serviced apartments in city center.

The same applies to offices. There are only two or three office towers in Yangon’s central business district (CBD). They are well-seasoned since completion in 1999-2000, or refurbished after being abandoned for more than 10 years (mind you Myanmar does have earthquakes). The first surprise to most business professionals starting-up businesses in Yangon must be the office rent.

At Sakura Tower, the highest quality office building in the heart of Yangon CBD, monthly rent is hitting $100 per square meter. Other CBD offices are a bit cheaper, but is around $75 per square meter, even with a centralised air-con which is switched-off at night while international business people are still working.

There is only one simple reason – scarcity. New developments are ongoing with rumors to be completed in 2-3 years, but given the speed of construction works and complexity in real estate regulations (foreigners are prohibited to own real estate titles), it might be too optimistic to believe the new supply would cool-down the rental market in a few years to come.

In response to rising costs of keeping CBD offices, many international companies moved to the outskirts of Yangon city and leased large houses as their offices. But the effectiveness of that strategy is doubtful, as internet connections are more difficult than in CBD, and buying a back-up generator preparing for daily black-outs especially during the dry season of a year, is costly. Moreover, as the government control on car imports have been eased and construction of a flyover bridge is underway, traffic conditions during office hours are getting worse and worse. Commuting time between outskirt offices and CBD is now unpredictable when streets are jammed with cars.

A new solution is offered by a duo of an American and a Japanese businessmen with long track records in financial services and business developments in Asia. The Sakura Myanmar Business Center (‘SMBC’) commenced operations from June 2013 at the 15th floor of Sakura Tower.

SMBC is a serviced office with bilingual secretarial services, high-speed Internet and meeting facilities and offers three types of memberships for international companies or individuals starting their businesses or investments in Myanmar.

These types are Private Suites, a monthly rental of furnished private units with floor areas of 9-12 square meters. Membership Shared Offices are low-cost office solutions for regular travelers to Yangon. And Virtual Offices are suitable for customers who only need a business address and mailbox services.

Bradley E. Smith, a SMBC Partner and ex-Wall Street investment banker, states, ‘Everything is backward in Yangon. Customers have no other choices but accept what is offered. We started from our ‘wish-list’ of what we would expect to have when starting-up our business in Yangon; and negotiated a space with the best Shwedagon Pagoda view and infrastructure such as high-speed internet, back-up generators, and 24/7 security. Sakura Tower rental may not be the cheapest in Yangon but we offer a  global-standard serviced office with a truly bilingual environment. When our members stay at SMBC from morning to night, they will not feel they are in Myanmar at all. Quality matters’.

(Takuya Matsubara is an Inside Investor contributor. The opinions expressed are his own.)

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