Wealthy Burmese Shun Rangoon’s Property Boom to Invest in London

People walk past a colonial-era building that is under repair in central Rangoon. (Photo: Reuters)

Burma’s richest citizens are taking their money out of the country and investing in upmarket property in London.

While foreign investors queue to get into Asia’s so-called “last economic frontier,” millions of dollars are flowing out and into bricks and mortar in the capital of the former colonial rulers, a survey has disclosed.

The volume of investment in London and elsewhere in Britain by Burmese in the 12 months or so is equal to that made by the wealthy of Hong Kong and Switzerland, said the survey published by PrimeResi, a journal covering the top-end of the UK residential property sector.

“Buyers from Burma accounted for just shy of 1% of all £2million-plus (US$3 million) properties bought in the UK in the 12 months to April 2013. That’s in the same range as buyers from Switzerland and Hong Kong,” said the journal, citing research carried out by London-based global real estate consultancy Knight Frank in its latest “Wealth Report.”

The potential for Burmese investing in London is so great that British property adviser LondonDom is this month opening an office in Rangoon.

LondonDom’s managing director George Shishkovsky told PrimeResi, “Our initial market research shows that there is a roughly 50-50 split in interest between new build and period properties with budgets between £500,000 and £2.5 million ($761,000 to $3.8 million).

“Some [Burmese] are interested in family houses outside of central London. Education in the UK is a big magnet to wealthy Burmese. Lots of them have strong links with Britain since colonial times.”

The international editor of Singapore-based property website Property Guru, Andrew Batt, said Asians in general view London as a safe haven for their money.

“I think with London and people from [Burma] there is also a cultural link, the historical link, and also a lot of Asians are buying in London for educational reasons. They want to send their children to school and university in the UK,” he told Myanmar Focus Daily, which publishes online videos about business news in Burma.

London-based global real estate consultancy Knight Frank, which compiled the “Wealth Report,” defines an HNWI, or a high-net-worth individual, as someone with assets of $30 million or more.

It claims in its latest report that Burma had 39 HNWIs in 2012, but forecasts that this will mushroom to over 300 people within 10 years.

“Expect HNWIs from frontier markets like Myanmar and Sri Lanka to become more prominent as they seek safe havens for their newfound wealth to mitigate the risk of renewed political tensions at home,” Sudhir Vadaketh of the Economist Intelligence Unit in Asia said in the report.

“Certainly our enquiry levels for advice have increased dramatically from new Burmese clients. In addition to the normal requirements [such as] what yield they can achieve, they place great importance on capital preservation,” said Benham and Reeves Residential Lettings in London, as quoted by PrimeResi journal.

“While we do not actually handle sales we are being asked for an unusually high level of information on where we think the market will go in these areas. Our enquiries have been for investment and none for owner occupied.”

Ironically, a large US property firm, Colliers International, is establishing an office in Rangoon to advise foreigners on investing in Burma’s property market.

“We see huge potential in the country with many of our clients seeking new opportunities in what is, arguably, the last major frontier market in the region,” Colliers chief executive Piers Brunner said in a statement this week. “It is important for us to have the operation in place to assist our clients, as they expand their business or real estate portfolio in [Burma].”

And Batt said major London property agent Savills has also announced plans to open an office in Burma.

“The fact that we are seeing these offices opening in Rangoon shows that there is potential for more growth” in London investments, he told Myanmar Focus Daily.

“We are going to see a lot more overseas developers and agents looking at Burma as a potential source of income.”

Land and property prices in Burma’s big cities, especially Rangoon, are rocketing.

The price of the best-located office properties in Rangoon have increased 150 percent in the past year, according to a recent report by the Wall Street Journal, and at $106 per square foot, is nearly double rates in parts of New York’s Manhattan district, the newspaper said.

“Commercial real estate is booming in [Rangoon] as foreign companies respond to economic and political reforms by setting up shop in the Southeast Asian nation,” said Leopard Capital this month. “Top-end office spaces in the city are commanding rents higher than anywhere in Asia with the exception of Beijing, Shanghai and Tokyo, and numerous skyscrapers are in development to meet the rapidly increasing demand.”

But clearly for some wealthy Burmese, now free of the constraints of the economic sections recently lifted by Britain and other European countries, London is regarded as a better bet than Rangoon.

Correction: An earlier version of this article published on July 19 did not provide proper attribution for two interviews. Andrew Batt of Property Guru was speaking with Myanmar Focus Daily, which publishes videos about business news in Burma, while quotes from Sudhir Vadaketh of the Economist Unit in Asia came from Knight Frank’s ‘Wealth Report.’

 


10 Responses to Wealthy Burmese Shun Rangoon’s Property Boom to Invest in London

  1. Why Myanmar people want to buy houses and properties in UK. ??? It make me not suprises if, Myanmar bussiness man put their investment in London or Singapore. According to my personal knowlege and research, in Myanmar there were at least ten to twenty billionaries iand more than ( 50000 ) were multi-millionaries. The city like London is not only for a safe heaven but also for the best education provider. Before 2010, there were about 6000 Myanmar student’s were study in Singapore NUS, NTU, and various Schoool in Singapore and 2000 to 4000 students in accross Universities in Malaysia. All of this sudent want their futher study in UK and other western countires. Most of them prefer to go to Oxforth and Cambrige in UK . All of this student’s were the families member of high ranking officer in Myanmar and their assocaited bussiness partbers..

    Who are this people and how they got the money??? . There were ( 70 ) retired general in Tinkankyunt- Thuwana and the name’s of their quater is call Bogyoke Ywar. All of them were retired not only from Army- general post but also from State and Division chief and variuos government minister post. Just beening a minister in government , they all became multi-millionars in US dollars and once they became Major -General or any other general , their wealth is increasing up automatically to multi-million dollars.

    There were not only from retires general but also from their associated families members and their partner’s wealth were almost the same amount. That is how they do bussiness in Myanmar. In another part , President Thein Sein government quasi-civillian government is heading for democratic way and at the same time , there were lots and lot of investment were coming to Myanmar, the properies for Land ans housing prices were going up to 150% . That is another way how Myanmar people getting richer and richers.

    Who has the money.???? A piece of Moggok Ruby and a ggod stone of Jade’s could buy one Unit Condo apartment in London, New York Manhattan area or Times Square area and any other cities. All of this stone mining area were belong to them and thier partners. A pieces of one paper sign by Arny general in Myanmar, coul buy the same apartment in any countires. You and me were un-lucky for not having any high ranking officer family member’s in Myanmar. So sad..

  2. With the careless handling of so-called economic opening and blindly following the so-called orders and advises from so-called more developed countries along with the greed and unbalanced distribution of opportunities, we already have

    – very expensive cost of living while majority of citizens earn lowest income of the world
    – very huge gap between majority poor and minority rich
    – one of the worse unbalanced distribution of opportunities, rights, and chances among the citizens
    – one of the lowest efficiency and productivity in the world
    – thinnest, smallest peoples
    – dirtiest, filthiest, the most ugly cities
    – lest green places and community places in towns and cities
    – very small magnitude of healthy forest and natural environment
    – one of the lowest education, mental and physical health level

    If there is a country where many of its citizens are unable to explore their own country due to expensive cost and/or limited rights to do so and/or because they simply do not know (not educated enough) that it is necessary – that is Myanmar.

    Please pay number one attention to
    – diverse and higher quality of public education
    – much higher level of mental and physical health and fitness of citizens
    – reduce the unbalance in access to opportunities and rights
    – increase efficiency and productivity
    – reduce wastes and, waste making activities and habits
    – reduce the production, import and consumption of all harmful food, materials and events
    (for example, alcohol, cigarette, betel nut chewing, pepsi, coke, tonic or energy drinks, cosmetics, plastics and foam packing, other environmentally harmful substances, cutting trees, direct or indirect promotion of non-natural and socially problematic life style)
    – instill attitude of always care for and making more greener, cleaner, and healthier communities among the public
    – for all those who have decent saving, encourage travel to remote places to learn the geography and to create long lasting friendship among different ethnic peoples to help make peace and to build a happier country together

  3. Apologies, but I’m going to go with ‘stream of consciousness’ for this one: Not hard to guess who these high net worth Burmese buying London might be…. That’s what happens when you have a ruthless gang of murderers who suddenly pretend they’ve seen the light and proclaim to the world that they will now tread the path of democracy oh and by the way let’s put a joint venture coal processing plant on that village over there never mind them ha ha we can give them a job making toxic toy pandas in one of those Chinese factories on the border well you know near it anyway it’s not that far from their village only 7 days by bus besides they’re too brown to be Burmese anyway and by the way would you mind awfully lifting those sanctions so I can buy a summer home in Marble Arch with the legitimately earned savings I acquired when I was a member of the death skull mine laying rape squad of the Tatmadaw?

  4. Regarding this article, almost half of the information on this article including the source and the quotes are very similar to my tv report which was uploaded on Youtube on July 17, 2 days before this article was published. I contacted my source who was mentioned in this article. He told me that he did not receive any email to quote him or to interview him on the matter from your writer. Moreover, the quotes used in this article almost exactly the same as the answers my source gave on the interview to my program. However, the article DID NOT MAKE ANY REFERENCE or CITATION to my program. It was written as if it was THE WRITER WHO GOT THE QUOTES HIMSELF. As I am journalist, I find this unethical to copy someone else’s work without any citation. Since I always look up to Irrawaddy, I will be highly appreciated if I could get some explanation from the writer or at least someone who is responsible for the article. My report can be found below https://www.youtube.com/watch?v=l98VN6ac8PE

  5. Is this a plagiarism from an episode of Myanmar Focus Daily? the quote are pretty much identical, where I saw on MFD first.

  6. Here this is the Myanmar Focus Daily I was talking about: https://www.youtube.com/watch?v=l98VN6ac8PE

  7. I bet that those 39 HNWIs Burmese (in 2012) are the rich with ties to military and hence are wealthy because of the the stolen money.

  8. These guys are copying what the nouveau-riche naked functionaries of China are doig: parking their money in the West and sending their children to school there (lots of Chinese like that in Canada, where I live, and it causes real estate bubbles.

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