Hoang Anh Gia Lai Group (HAGL) is expecting to earn billions of dollars over the next five years from its $ 300 million initial investment in Myanmar this year.
The real estate developer will prioritize the development of its complex $ 300 million in Yangon in 2013 following the innovative project after the Lunar New Year, President Doan Nguyen Duc said HAGL.
HAGL and Ministry of Hotels and Tourism on December 18 Myanmar struck a BOT (build-operate-transfer) contract and an agreement to lease land to build the complex, the Hoang Anh Gia Myanmar Lai Center, which consists of a hotel five star hotels, a shopping mall, office building and apartments for rent.
HAGL said he had granted permission to lease a plot of 8 hectares in downtown Yangon, adding that all legal proceedings on the side of Myanmar are completed.
"If we hurry that [the project], we pocketing US $ billions when the housing market in Myanmar is heated during the next five years," Duc said.
"Over the past three years, the real estate markets in Ho Chi Minh and Hanoi have been at freezing point, 0 degrees Celsius, but the Southeast Asian market recently opened is 18-20 degrees Celsius."
"It's going to be around 80 degrees Celsius by 2018, an ideal choice for real estate developers temperature," he added.
Initially, the first phase of the project to be completed in 2013-2015 was planned. However, Duc has changed its tactics for HAGL can complete the first phase in 2013 and put into operation in 2014.
Currently, HAGL is gradually exporting building materials Vietnam to Myanmar. It is expected that the project will consume 30,000 tons of steel and 200,000 tons of cement and other building materials such as wood, stone, glass, aluminum and bricks from Vietnamese companies.
Duc, the second richest in the stock market of Vietnam man said that it is cheaper to transport construction materials needed from the headquarters of HAGL to work to Ho Chi Minh City, and the average salary of Myanmar unskilled workers is half of what they are in Vietnam.
However, the resource is not in the shipping cost of building materials, but the high prices of real estate there, that are 4.3 times higher than the Vietnam due to tight supply, according to a survey of two years at home.
Specifically, rents offices Grade A and Grade B in Yangon were $ 100 and $ 80 per m2 per month, 3.3 times and 4 times higher than in Ho Chi Minh City.
Renting an apartment 60 m2 bedroom is $ 5,000 per month, about 2.5 times higher than in Vietnam. The rate for 2-3 bedrooms to rent is up to $ 8,000 a month.
A stay in an old 4-star hotel cost $ 300-400 per night, and are always fully booked due to a shortage of supply.
At these rates, HAGL can earn $ 300 million annually to lease 1,000 apartments in the complex. You can rake in $ 100 million a block of office buildings a year after the first draft was completed.
A block of office buildings can be exploited for 7-10 years, so the revenue this is only about 700 million to $ 1 billion in total, he added.