DOWNTOWN is the busiest and most crowded area of Yangon and commercial property in Kyauktada, Latha, Pabedan and Lamadaw townships are the most sought after in the city. Rental prices in these areas have risen significantly since the tax law changes in August 2007.

These townships are also popular because they are in an established commercial district, particularly for retail. The transportation links are good, there’s good access to the international port and there are thousands of people that live in the many apartment blocks in the area.

Ground floor spaces are the most sought after and expensive. The current sale price for a ground floor office or retail space on a main road about K250,000 per square foot and if planning to rent tenants should expect to fork out about K1300 a square foot per month for a similar property.

If the property is in away from the main roads, in a laneway for example, ground floor premises are about K150,000 a square foot or K600 a square foot per month for rental. Ground floor properties are most popular with restaurants and retailers such as computer sales/service centres.

Most small offices are about 625 square feet and landlords usually expect at least three months in advance.

If money is tight, you should consider renting an upper floor for your small business. The difference in price is significant; sale price is K25,000-40,000 a square foot and K300 a month per square foot for a rental in the downtown townships.

These prices include electricity and water supply, a phone line and the other necessary infrastructure for a business. However, one thing to bear in mind is that many of these properties do not include car parking – often this is the renter’s responsibility.

The landlord-tenant contract period is nearly always a minimum of six months but most contracts are for one year, by which stage the owner usually knows whether the business has a future or not.

However, businesses such as restaurants and sales centres sometimes sign on for contracts of up to three years. In this situation, the contract will normally specify how much the rent will increase each year, generally between 10-15pc.

If the downtown areas are too expensive or you can’t find the right property, another option is to investigate commercial properties in nearby Tarmwe, Kyaukmyaung, Sanchaung and Mingalar Taung Nyunt townships.

Industry sources say these areas are the next in line to develop into major commercial centres as downtown prices rise.

“If money is tight, people will be looking at properties in townships such as Bahan, Sanchaung, Dagon and Mingalar Taung Nyunt. So those areas have a lot of potential to develop as real commercial areas,” said U Zaw Zaw, manager of Unity Real Estate agency.

Real estate agencies advise that the first step for business owners who are looking at signing a lease should be to discuss the agreement with an experienced agent and a legal consultant to avoid any poor decisions that could hamper your business’ chance of succeeding.