Shop House and Retail Space in Yangon – 5 Choices to Consider
6 Feb 2017 – Shop House and Retail Space in Yangon – With a population of more than 50 million, Myanmar is a large untapped market for retailers and shop house tenants. As median income rises with increased economic activity (Myanmar has one of the highest GDP growth rates in the world according to World Bank data), more citizens have an increasing amounts of money to spend on shoes, purses, clothing, and meals outside of the home.
In a recent Yangon Retail Q4 Snapshot, Colliers Myanmar has noted that despite an increase in the amount of available new retail space coming to market, the average occupancy level in the malls remains VERY high, at something above 85%. For retail tenants, this means that rental rates remain high and may not see a decline in the coming months. To access the full Q4 Retail Snapshot from Colliers, click here.
[If you want to see some incredibly helpful data on the size of the opportunity for retail markets, download this 42-page Consumer Goods Guide 2016 by EuroCham Myanmar.]
We continue to see more vacancies in shop houses as the new malls garner most of them attention. Though, even private shop houses in Yangon fill up quickly due to competitively low rental rates.
As more malls open (the Junction City Mall is hoping to soft launch in March 2017), people will spend more of their time indoors, something that will no doubt become even more important as rainy season approaches in June or July.
Top 5 Considerations for Choosing a Retail Space or Shop House in Yangon
#1 – Pick a Mall, Most of Yangon Visit Them on Weekends – Buildings like Junction Square Mall, the Myanmar Plaza, and Junction City will cost more money per month than a shop house, and will require more input to set up the space. In return, however, they offer significantly more foot traffic than private outside spaces. If you have a brand that needs multiple outlets, you MUST have a shop in one of the top four malls.
#2 – Decide on Area of Town, First – Knowing your particular consumer and where they will search for your brand, determine which township you want to locate in, first. If you’re seeking clients downtown, there are many, many ground floor shops to consider. To access customers in Yankin, the Myanmar Plaza Mall or Yankin Center are a must view.
#3 – Look at All Your Options – If you decide that a private shop house is best, then you should check all available sources of leads. No single agency or listings site has a view on the entire city. Check the major listing sites such as ShweProperty, iMyanmarHouse, and House.com.mm; but also consult with agencies like ours that don’t ask for a tenant fee. We have a limited, but growing, number of shop houses for rent in Yangon; and have experience working with clients in large malls, too. Finally, spaces inside City Mart Market Place locations are hard to get, but may be worth the effort due to their very specific foot traffic.
#4 – Think about the Upfront Costs – Most malls allow quarterly rental payments, but also require multi-month deposits, and the fit-out cost can be substantial. Private shop houses for rent in Myanmar typically don’t require as large a deposit but will ask for 6-12 months rental payment up front.
#5 – Operating Costs Matter – Malls have some amount of monthly management fees, require marketing spends, and may take a percentage of the top-line sales. Private shop houses in Yangon don’t have those same fees.
BONUS #6 – Licensing Issues – If setting up a restaurant in a private space, such as a shop house or villa, you must have the approval of most of your neighbors via their signature on a key document. This has hampered even some of the best-known restaurants in Yangon, as some neighbors prefer not to have the noise or traffic that a restaurant attracts.
If you want to talk about the retail market, drop us a note at info[at]theMDLcompany.com. We have helped many restaurants and retail spaces set up in Myanmar, so likely have more helpful insights to offer.
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— Team MDL || email: info[at]theMDLcompany.com || phone: +95 996133 5380
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