Supply
Yangon serviced apartment supply stock was unchanged QoQ at 1,378 units, but up 30% YoY. The latest developments introduced were in H2 2015 namely Kokkine Residence and Sakura Residence 2.
Twelve new projects are currently in the pipeline which translates to more than 3,000 units - due to complete within the span of five years. The majority of these are expected to be upscale while the market for limited or non-serviced apartments remain widely untapped.
The total supply is projected to increase towards the end of the year following the completion of Daewoo Amara Serviced Apartments with 321 keys.
Demand
The occupancy rate slightly declined by 2% QoQ but remained healthy, being above the 90%-range. The rate should move upwards in the succeeding months albeit at a more modest pace. Demand is assumed to be continually restrained in the near future as companies wait until the formation and initial actions of the new government.
Further investment liberalization should exert upward pressure to the overall occupancy in the medium to long term. At present, the Oil & Gas, IT & Telecommunication, and the service sector, are the key sources of demand.
Rent
The average rental rate remained generally stable since Q1 2015. However, the upper price segment will correct within the near to medium term as supply becomes substantial.
As demand is projected to be stronger for better-quality developments, rental rates for older and poorly-maintained serviced apartments (unless refurbished) should decline going forward.
Source : http://www.mmbiztoday.com/