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Overseas Property News

Soilbuild inks condo venture in Yangon

Luxury apartment project with 250 units to be sold at US$300-350 psf

Posted on 30-Jul-2013
By: Mindy Tan

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Soilbuild inks condo venture in Yangon

MARKING its first overseas development project, Soilbuild Group Holdings has entered a joint venture to develop a high-end condominium in Yangon, with about 250 units.

While it will be one of several high-rise projects being launched in Yangon, the development, which is located on Kabaraye Pagoda Road - along one of the main arterial roads in Yangon - will stand out given that it will boast higher specifications including imported marble in the living room and Burmese teak in the bedrooms, said Daniel Ding, director, business development and investment, at Soilbuild Group Holdings.

The group intends to market the units at between US$300 and US$350 per square foot when it is launched.

Units at the project will range from 1,500 sq ft to 1,700 sq ft in size.

The project, which is being undertaken by Soilbuild Group Holdings and its joint venture partner, Ayeyar Hinthar Group of Companies, will have a gross development value of about US$120 million, added Mr Ding.

While the construction contract, which is estimated to be about US$50 million, has not yet been awarded, Ho Toon Bah, executive director at recently-listed Soilbuild Construction Group (SBCG) said there is a "good expectation" that SBCG will clinch it.

"Among the local contractors, yes, it is competitive," said Mr Ho. "But when I go into Myanmar, I bring in design and construction concepts that these guys have never seen before... Whether it's the way we manage the project, design the project, or construct the project, because they were closed off for a long period of time... people look at us differently (and) we have that slight edge over them."

The group is currently in negotiations with the local authorities over when they can start construction. An open tender will be called at a later date.

SBCG made its intention to expand into Myanmar clear when it launched its initial public offering in May this year, setting aside up to 11.9 per cent of net proceeds for this purpose.

In June, SBCG announced that it had landed a US$1.1 million contract to provide project management and professional consulting services for the erection of a 24-storey residential tower in Myanmar. It had previously secured two other contracts in Myanmar.

Fully embracing its "early mover advantage", Soilbuild Group Holdings is still on the lookout for deals, said Mr Ding. "We are still looking at perhaps one or two smallish or similar sized deals. But we are not going to rush into it. We will have to study all the different aspects - who is the counter party, the location of the project, sellability, risk management, and of course, the size."

"(These projects) won't be restricted to the residential sector. We have spoken to people about potentially doing serviced apartments because we do think there is a shortage of good quality serviced apartments," he added.

Indeed, while the group - behind industrial projects including Solaris and West Point Bizhub - is keen to enter the industrial sector in Myanmar, it is not their primary focus at the moment, said Lim Chap Huat, managing director at Soilbuild Group Holdings.

"Industrial will be the second stage," said Mr Lim. "The infrastructure must be there, with more clarity on the rule of law."

Now, the group is focusing on developing and selling homes and, potentially, developing a serviced apartment project, to cater to the opening economy. "When companies want to set up there, they will send their senior staff in to do marketing before they move all the manufacturing in... So stage one will be setting up offices, and when you put senior staff there, they will require decent apartments to stay in. So we expect residential to be quite well received for the first couple of years," he said.

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