AS HOTELS clamour for a slice of Myanmar’s real estate, experts warn that those keen to invest should do so with their eyes wide open.
Benjamin Hirasawa, senior consultant at DLA Piper, a law firm specialising in hospitality and leisure, said it would be wise to go in with “patience and education”.
“There are a lot of people anxious to get into the Myanmar market now, but they should know that it is still a challenge inside. Many owners and operators will face problems if they do not understand what their investment really means, for instance how to get their money in and out of the country,” he told TTG Asia e-Daily.
For example, he said the Central Bank of Myanmar has “routinely attempted to limit the outflow of the already low levels of foreign currency reserves”.
John Koldowski, special adviser to the CEO, PATA, also cautioned it may be “too early” for investors to enter the market as there were still issues like telecommunications and infrastructure that have yet to be ironed out.
Myanmar’s shift to an open economy in recent years and room crunch are sparking a gold rush in its tourism sector (TTG Asia e-Daily, January 25, 2013). Hotel chains such as Accor, Best Western International and Hilton Worldwide have announced new properties for Myanmar (TTG Asia e-Daily, March 12, 2013).
Hirasawa said: “Myanmar offers tremendous potential, but before entering the market, it is wise to conduct thorough due diligence of all hotel developments to understand the risks involved.”
He highly recommended that owners and operators consider employing a local agent in view of domestic complexities. “It will be useful and will surely make a difference to have someone who knows the place and language well.”