Singaporean company secures 50 per cent stake of HAGL Myanmar Centre, one of the largest mixed-use developments in Myanmar's capital Yangon.
The Hoang Anh Gia Lai Joint Stock Company (HAGL) and Rowsley Ltd., a Singaporean real estate developer and architectural and engineering consultancy firm, announced a proposed deal for a mixed-use development valued at $550 million in Yangon, Myanmar, on February 12.
Under a Heads of Terms Agreement, Rowsley will invest $275 million for a 50 per cent stake in HAGL Land under HAGL, which fully owns the HAGL Myanmar Centre, one of Myanmar’s largest integrated projects, with four office blocks, a five-star hotel, a retail mall, serviced apartments, and residential apartments. HAGL will make further investments and will undertake construction of the entire project.
Spread over more than 73,000 sq m in a prime neighborhood next to Inya Lake in Yangon, the HAGL Myanmar Centre will have a total net gross floor area of almost 640,000 sq m when fully completed in 2018, comprising both commercial and residential components.
It is located eleven kilometers from the airport and seven kilometers from the downtown area and is surrounded by embassies, schools, affluent residential areas, and government offices.
The first phase of the development includes two office blocks with a net leasable area of about 81,000 sq m, a retail mall of about 39,000 sq m, and a 400-room five-star hotel, and is expected to be completed by the end of 2015.
Construction of the first phase started about two years ago and the second phase, comprising another two office blocks with net leasable area of about 94,000 sq m and more than 1,000 serviced and residential apartments, is expected to start in early 2016.
“We are delighted to participate in this investment with HAGL,” Rowsley Chief Executive Officer Lock Wai Han said. “The HAGL Myanmar Centre will be a major landmark in Yangon when completed as it is the largest and first modern integrated development in the country.”
According to Mr. Lock, Myanmar has seen rapid developments in the last few years and is without a doubt Asia’s rising star. Yangon currently faces a severe shortage of top grade office space, hotels and modern malls. “The first phase of the HAGL Myanmar Centre will be operational in 2015 and will immediately address the acute shortage of real estate in all these asset classes,” he added.
Rowsley and HAGL Land will initially both hold 50 per cent stakes in the joint venture, with Rowsley having the option to increase its interest in the joint venture in the future. “Rowsley, with the participation of RSP Architects, will play a key role in the detailed design and development of both phases of the development and undertake the lead in asset planning and managing the completed development,” said Mr. Lock.
The Group intends to fund the investment through a mix of debt, equity, and bank borrowings.