The luxury Peninsula Hotels chain has abandoned a stalled US$130 million project in the heart of Yangon, saying it has no future in junta-ruled Myanmar.
The project was to have been a joint venture with detained Myanmar tycoon Serge Pun’s Yoma Group, which held a 30 percent stake.
The Hongkong and Shanghai Hotels, which owns the chain, wrote off the entire book value of the project, citing a bleak outlook four years after the Myanmar coup, according to a profit warning posted on the Hong Kong Stock Exchange.
On Friday the hotel operator announced a $20.51 million so-called “impairment provision” for the Peninsula Yangon project, matching its remaining book value at the end of June.
“Development work for the project is still on hold and the outlook of the tourism market in Myanmar continues to be uncertain,” the board explained.
Following a management review to see if the book value could be recovered, the directors instead determined it “appropriate” to write it off.
The planned 88-room hotel in central Yangon was part of an effort to redevelop the splendid colonial-era Myanmar Railway headquarters.
Construction began in 2017 and was originally slated for completion in 2022 but halted four months after the February 2021 coup.
Lynne Mulholland, the hotelier’s PR director, told Nikkei Asia that the “long-term view” on the project’s development “remains unchanged,” and that the write-off was a “prudent financial/accounting decision.”
Serge Pun (72), along with other Yoma Bank and Yoma Strategic Holdings executives, has been detained since June 2024. The following month, he stepped down as an executive of the Singapore-listed Yoma Strategic Holdings Limited after 17 years at the helm.
A Yangon-based source with close ties to Serge Pun’s family said that he remains under house arrest in Naypyitaw. “The court hearings are ongoing, with fortnightly remands, and a verdict has not yet been issued,” he said.
Pun was initially detained for allegedly providing mortgages for Thai property sales and released after a few days. He was subsequently detained again and, according to sources familiar with the case, charged with money laundering and other illegal transactions.
He faces two additional charges: misusing public funds and harming the national government’s interests.
Sources told The Irrawaddy that these charges stem from his alleged use of criminal proceeds from online scam centers to invest in the expansion of Star City, a large real estate project in Yangon’ Thanlyin Township. The sources added that Chinese authorities asked the regime to investigate the source of the funding.
After Serge Pun stepped down from the leadership of 105 Yoma firms, including FMI, SPA, Pun Hlaing, and Myanmar Thilawa Special Economic Zone Holdings, Yoma Strategic appointed his eldest son, Melvyn Pun, as chair. He was already the CEO.
The Peninsula Yangon was part of the Yoma Central project—formerly known as the Landmark Development—on a 10-acre site in the heart of downtown.
Other partners included Mitsubishi Corporation, Mitsubishi Estate Co. Ltd, the International Finance Corporation, and the Asian Development Bank. Besides the hotel, it was also to feature Peninsula-branded luxury residences, a business hotel, and high-end office towers.
Yoma Strategic has made no public comment, and The Irrawaddy’s attempts to reach communication officers were unsuccessful.
