SEZ law sparks industrial zone interest, but not for all
(February 14 - 20, 2011 - Volume 29, No. 562)
PRICES at Yangon’s industrial zones have shot up in the wake of the enactment of the Special Economic Zone (SEZ) law on January 27, real estate agents say.
The law, which is squarely aimed at attracting foreign direct investment (FDI), has led to an immediate upsurge in enquiries, say agents.
An agent based in downtown Yangon in Kyauktada township said that in the wake of the SEZ law’s announcement prices in some industrial zones have jumped by as much as 25 percent in less than two weeks.
“This law looks like it’s going to focus demand on all of the industrial zones in Yangon. At War Ta Yar Industrial Zone, an acre of undeveloped land has risen to K50 million, from K40 million before January 27. And at the Thilawa Industrial Zone in Thanlyin township, prices have risen to K65 million from K50 million within 10 days,” he said.
He added that his agency is handling about 33pc more requests from customers since late January and tipped industrial land prices to rise by another 25pc within six months.
“The release of the SEZ law is an overwhelmingly positive development for industrial zones,” he said.
However, a spokesperson for a Tarmwe-based real estate agency said that in his opinion the impact of the SEZ would not be felt for long in Yangon and would likely only be felt in Dawei, where Thai firm Italian-Thai will build a 250-square-kilometre development.
He added that Dawei’s proximity to Thailand would make it far more attractive to investors from that country. However, he predicted that interest in Yangon’s industrial zones might heat up after the Thingyan festival in April.
“Unlike Dawei, Yangon’s industrial zones don’t have any guaranteed FDI coming in but I think demand might rise after Thingyan,” he said, adding that Chinese investors were more likely to be interested in Yangon’s zones.
U Myat Thin Aung, president of the Hlaing Tharyar Industrial Zone Management Committee, said the newly enacted law was most likely to affect industrial zones close to deep-sea ports, such as the one to be built at Dawei, the Thilawa port in Yangon, and two ports in Rakhine State, one at Sittwe and another at Kyaukpyu to allow oil tankers to disgorge their cargo into the pipeline that links to Yunnan in China.
“I think that FDI will only eventuate for zones other than Dawei when the whole set of SEZ laws have been issued and foreign companies have had time to carefully investigate them,” he said.
However, he added that even those zones that attract foreign investment will take at least two years for the proposed factories – and the infrastructure they require – to be built and begin operating.
