Market remains strong for landed properties Summary • Growing demand for luxury gated villa developments • Mixed picture for high rise condominium living • Slow improvement in retail offerings but still in its infancy • Increasing opportunities for Mandalay with Belt & Road Initiative

1. Myanmar | research reports
Mandalay
PROPERTY MARKET REPORT H1 2019
Market remains strong for landed properties
Summary
• Growing demand for luxury gated villa developments
• Mixed picture for high rise condominium living
• Slow improvement in retail offerings but still in its infancy
• Increasing opportunities for Mandalay with Belt & Road Initiative
CONDOMINIUM UNITS BY TOWNSHIP IN MANDALAY 2019
Source: Picon-Deed Research / Pho La Min Real Estate Agency
POPULATION BY TOWNSHIP 2015
265,779
197,175
241,113
283,781
237,898
Aung Myay Thar Zan
Chan Aye Thar Zan
Maha Aung Myay
Chan Mya Tharzi
Pyigyitagon

2. Mandalay Property Market Report H1 2019
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INTRODUCTION TO MANDALAY
The city of Mandalay is the main commercial centre for
central and upper Myanmar and is also the major city in
the Mandalay Region. The city acts as an important
transit hub primarily for jade, other gems as well as
agricultural products, with strong trade connections with
China and to a lesser degree, India.
The city had a population of 1,226,000 based on the
2014 census with a significant proportion being of
Chinese descent. During the economic sanctions of the
1990s and 2000s the city has forged ever-closer
economic ties with China.
Mandalay International Airport is the second busiest
airport in Myanmar and the city acts as a jumping off
point for tourists wishing to travel around the north of
the country as well as being a tourism destination in its
own right with the main focus being the nearby Mingun
zone across the Ayeyarwaddy River. A more central
focus is the Mandalay Palace.
The palace grounds take up around four square
kilometres of city’s centre and is likely to be the main
reason that Mandalay has historically not developed a
distinct urban downtown. This, along with hilly areas and
pagodas to the north and rivers to the west, have meant
that the city has expanded more in a southerly direction.
Mandalay contains five urban townships that account for
the vast majority of economic activity of the city and
together form the Mandalay City Development
Committee (MCDC). Chan Aye Thar Zan represents the
original business district containing the main railway
station and Mandalay General Hospital as well as many
businesses, mostly occupying traditional shophouses.
Aung Myay Thar Zan is the northernmost township of
the city and contains the most well-known tourist sites;
namely Mandalay Palace and Mandalay Hill. As a result
the township hosts a number of upper-scale hotels.
Maha Aung Myay is south of Chan Aye Thar Zan and
includes significant residential areas and – as a result –
is the most densely populated township in the city.
The city has expanded south with significant growth
taking place in Chan Mya Tharzi Township with its
greater availability of larger land plots for development
including the old Mandalay airport. Pyigyitagon is the
southernmost township of Mandalay City and is less
developed and contains the industrial zone of
Mandalay.
CONDOMINIUM SECTOR
SUPPLY OF CONDOMINIUM UNITS IN MANDALAY
Source: Picon-Deed Research / Pho La Min Real Estate
Agency
Unlike Yangon, Mandalay does not have a strong
association with high-rise living due to the greater
abundance of land and better traffic mobility. According
to the 2014 census Chan Aye Thar Zan and Aung Myay
Thar Zan have 13% and 12% of households living in
apartments respectively; other townships have much
lower percentages living in apartment buildings.
However, over the past decade there has been an
interest in condominium development, especially
during the jade trade boom to China between 2012 and
2015. This led to a surge in cash flowing through the
economy and condominium units provided a means to
store the wealth, in similar fashion to Yangon during the
same period. The surge in growth of supply in 2019 is
due to the expected completion of an affordable
housing project in Pyigyitagan
CONFIGURATION OF EXISTING UNITS IN
MANDALAY
Source: Picon-Deed Research / Pho La Min Real Estate
Agency
-
200
400
600
800
1,000
1,200
1,400
1,600
2013 2014 2015 2016 2017 2018 2019 est
Units
Supply at start of year New supply
0 100 200 300 400 500 600
One bedroom
Two bedroom
Three bedroom
Four bedroom
Units

3. Mandalay Property Market Report H1 2019
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The Mandalay condominium market is dominated by
larger unit sizes in mostly the two- and three-bedroom
categories. The units mostly target wealthy buyers who
usually look to purchase units with large family sizes in
mind.
Prices for units range between USD 1,000-2,000 per
square metre and sales have been mixed with a number
of developments recording strong sales velocities, while
others are struggling to find buyers. Those
developments with better construction and facilities
seem to be performing better.
There is a higher propensity for landed property in the
city, with more land available and easier mobility
courtesy of motorcycles and wider roads than Yangon.
Therefore condominiums in Mandalay promote facilities
such as gyms and swimming pools along with views that
distinguish them from landed housing.
HOUSING SECTOR
According to the 2015 census only 7% of households in
Mandalay City live in apartments or condominiums,
compared with 26% for Yangon’s urban population.
Contrastingly, the percentage of households living in
brick houses in Mandalay is 16%, compared with 9% in
Yangon. Given the better transport infrastructure in
Mandalay and greater abundance of land, the
development of gated housing developments was only
a matter of time. The first project was a gated
community within the Mingalar Mandalay mixed-use
development.
The popularity of such developments has led to a
number of new projects that are either completed or
under construction; more than 220 new villa units are
expected to be finished by the end of 2020. Patheingyi,
to the east of the city, is a popular area for such
developments because it provides greater access to
larger land plots and more affordable land prices. Most
villas have four or more bedrooms and cater mostly to
the high-end market.
Key landed developments are The One by Myanmar JHI
and Nan Oo Lwin by New Star Light Construction. Take
up has been strong for these developments and high
quality projects in the future should also be successful.
RETAIL / OFFICE SECTORS
The mass retail scene remains limited, with what activity
there is taking place in shophouses and traditional
markets. However, a number of more modern shopping
locations have sprung up in the past five years. The most
notable is Mingalar Mandalay in Chan Mya Tharzi, a
mixed-use development that includes a pedestrianised
shophouse complex and two small shopping centres.
Other shopping centres have sprung up but are not
popular due to poor design, unattractive tenant mix and
lax maintenance; these centres struggle to attract the
growing number of foreign brands that are expanding
in the city. A new community-style mall opened up in
2018 called Central Point that has a more modern
design.
As regional and international brands swept into Yangon
starting in 2013, Mandalay was not far behind with many
setting up due to high spending power. Some shopping
centres have benefitted although shophouses are
preferred to poorly run malls. Mandalay is also
witnessing the growth of modern cinema complexes
located in new shopping centres.
Rental rates for malls range from less than USD 5 per
square metre per month (psqm) in lower quality
shopping centres up to around USD 18psqm in prime
locations in the more popular malls.
A number of office buildings were planned but later
abandoned due to a lack of demand. As the main
commercial city in the north of the country, Mandalay
has its fair share of businesses, but most occupy
shophouses or villas that are often owned by the
business. The development of an office is usually
kickstarted by foreign tenants but at present these are
limited in number and scale of operations in Mandalay.
During the early development phase in frontier markets
almost all office development takes place in the main
commercial city. It should be noted that in Thailand
there is negligible office space outside Bangkok.
However, with a less centralised economy and particular
ties with China, the development of some dedicated
office space in Mandalay may materialise within the next
10 years, especially if the Belt and Road Initiative (BRI)
has a significant economic impact on the city.

4. Mandalay Property Market Report H1 2019
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HOTEL SECTOR
The growth in tourism in Mandalay from 2012 coincided
with a boom in jade and other gem sales to China, with
Mandalay being the main commercial hub for this trade.
This led to some of the proceeds being steered into the
development of mid-range hotels as a way to store
wealth and also benefit from the growth in arrivals into
the city. Mandalay was on the itinerary for many western
tourists and ever-increasing trade links with China meant
more businesspeople coming to the city.
SUPPLY OF MID-AND UPPER-SCALE HOTELS IN
MANDALAY
Source: Picon-Deed Research
Hotel supply doubled in the two years from 2012 and
continued to grow significantly until the present day with
over 5,000 mid- or upper-scale rooms available.
However the surge in arrivals was not enough to absorb
the number of new rooms supplied and the sector now
suffers from a glut of rooms even during the high
season.
In the past most visitors could only access Mandalay
through domestic flights from Yangon. However, over
the past few years there has been a growth in direct
international flights with most from China and a number
direct to Bangkok or Chiang Mai in Thailand.
Guangzhou, Kunming, Wuhan, Shenzhen and Tianjin are
some of the Chinese cities that can now reach Mandalay.
Given the reduction in numbers coming from Europe
and North America mostly due to the northern Rakhine
situation, China is seen as the number one contributor
to visitor numbers to Mandalay with an emphasis on
business travel.
PROPORTION OF MID AND UPPER SCALE HOTEL
ROOMS IN EACH TOWNSHIP OF MANDALAY
Source: Picon-Deed Research
Chan Aye Thar Zan contains nearly half of the mid to
upper scale rooms in Mandalay with the township being
the main business and entertainment hub of the city.
Over 90% of the current hotel supply is located in the
three most central townships of Mandalay.
During the past few years a number of international
hotel brands have entered Mandalay. Best Western
branded the Hotel Shwe Pyi Thar before withdrawing.
Sedona Hotel was purchased by the Myanma
conglomerate Eden Group from Singapore’s Keppel
Land in 2016 and then rebranded as Hilton Hotel. The
long-established Mandalay Hill Resort by Thai
developer LP Holding was rebranded as Mercure
Mandalay Hill Resort Hotel. The hotel was previously
under Accor Hotel’s Novotel brand until EU sanctions
were imposed on Myanmar in 2002. Mandalay Hill
MGallery by Sofitel is planned on the plot alongside the
Mercure Mandalay Hill.
Accor Hotels are expected to further extend their
presence in Mandalay in the future with a mixed-use
development called Ye Dagun Taung City in Patheingyi
Township. A 5-star Novotel Hotel and 3-star Ibis Hotel
are planned, and should be constructed within the next
four years. The hotel group’s domination of the city’s
upper-scale sector will be further extended by the
opening of the Pullman hotel at the Mingalar Mandalay
mixed-use development.
-
1,000
2,000
3,000
4,000
5,000
6,000
2012 2013 2014 2015 2016 2017 2018 2019
Units
Supply at startvofyear New Supply
Aung Myay Thar Zan
19%
Chan Mya Tharzi
49%
Chan Mya Tharzi
9%
Maha Aung Myay
23%

5. Mandalay Property Market Report H1 2019
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AVERAGE LOCATION RATING BY TOWNSHIP IN
MANDALAY
Source: Picon-Deed Research / Agoda
The two most popular townships for location ratings are
where most tourism, shopping and entertainment
destinations can be found. The city is widely spread out
with limited public transport so areas outside of the main
focal points tend to be less popular.
INDUSTRIAL
Mandalay Region is the second most important location
for industrial activity in Myanmar behind Yangon Region.
Two small industrial zones are located in Myingyan and
Meiktila, catering mostly to small local businesses that
mostly serve the domestic market. Pyin Oo Lwin also
contains some industrial activity focused on its
flourishing coffee sector.
The most prominent industrial area is Mandalay
Industrial Zone, which is located in Pyigyitagon
Township and has around 500 factories in operation.
Yangon Region’s industrial development has grown
significantly since the opening up of the country in 2011;
however in Mandalay the situation has stagnated or
even reversed over the past few years as the mostly
small factories struggle to compete with cheaper
imported products, mostly from China. Limited port
access has made it difficult to attract export-orientated
manufacturers.
An industrial park around 58km southwest of Mandalay
has been planned for the past seven years. Myotha
Industrial Park (MIP) comprises 11,000 acres of land for
development. Infrastructure is being constructed and a
number of factories have already established there. One
of the key features is access to Semeikhon port, which is
expected to have adequate draft during the rainy
season to dock container barges that can then travel
both domestically and to China and India. Whether this
development will be attractive to larger scale export-
driven manufacturing remains to be seen.
LOGISTICS
Currently Mandalay is hampered by poor overland
transport infrastructure connecting China. Limited
supply chains and almost non-existent cold storage
facilities means that there is significant wastage of
agricultural produce exported to China and limited
value-added benefit from its raw materials.
China’s ambitious BRI encompasses neighbour
Myanmar and specifically Mandalay through the China-
Myanmar Economic Corridor. A recent feasibility study
was conducted on a Muse (a border town with China) to
Mandalay railway travelling at a maximum of 160km per
hour on 431 kilometres of track. One major obstacle is
security – the line passes through parts of Shan State
where clashes between various armed groups and the
Myanmar military sometimes occur.
Also planned is an expressway running parallel to the
railway and then heading on from Mandalay to
Kyaukphyu, a planned deep-sea port in Rakhine State
that is a key part of the BRI in Myanmar. With the
intended railway terminating at Mandalay, the city could
develop as an important transhipment hub as well as a
final assembly manufacturing base that would currently
benefit from preferential tariff treatment. The reduction
in travel times would also increase the flow of Chinese
tourists using Mandalay as a travel destination and base
for further travels.
A dry port is in the process of being constructed at
Myitnge in Amarapura Township that is expected to
have some bonded warehouse facilities that will
enhance Mandalay’s promise as a logistical hub,
especially for more efficient distribution of agricultural
produce from the north of the country.
As with all large infrastructure projects, significant
caution is advised but an improvement in the overall
infrastructure surrounding Mandalay would create
considerable opportunities for future economic growth.
5.0
5.5
6.0
6.5
7.0
7.5
8.0
8.5
Chan Aye Thar Zan Aung Myay Thar Zan Maha Aung Myay Chan Mya Tharzi
AgodaLocationReviewAverageScore
Township

6. Mandalay Property Market Report H1 2019
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