Shoppers investigate a longyi shop in Yuzana Plaza.

RETAIL spaces in the busy shopping malls near the downtown commercial area are enjoying strong rental demand but buyers are staying away, a number of shop owners said last week.

U Khine Zaw, distributor of food staff and medicine in Mingalar market, said most shop owners and managers are looking to rent for the time being.

“The most demanded spaces are between the ground and fourth floors, which are usually filled by clothing, food and pharma-ceutical shops,” he said.

He said the value of these shops had increased over the past six years driven by higher demand for space.

“More and more new shops have opened in this period and when you visit a shop in these malls you notice that you have to squeeze yourself between shops. Before, there was plenty of open space to navigate between shops.

“The sale prices of these shops have increased over that timeframe by about 600 percent, and rents have jumped by between K5000-10,000 a month over last year,” he said.

He said that current sale prices for 25-square-foot shops is about K6 or K7 million but could be as high as K10 million for a plum location.

But the rents for these spaces are only K30,000 to K70,000 a month.

He said most of the shop owners are wholesalers who sell to distributors from Upper Myanmar and other smaller local businesses. Their market shops are just shop fronts where customers can examine goods and buy small orders – larger, wholesale orders are supplied from separate warehouses elsewhere, he said.

U Chan Chan Naung, the owner of Kyar Nyi Naung toy shop in Thein Gyi bazaar, said that rental prices around his shop have increased by K40,000 a month over last year.

“Shops in a nice location are about K100,000 a month this year, while they were only K60,000 last year.

“But I think the market is unstable. Plenty of people are entering the market for the first time but many shop owners are also getting out,” he said.

He added that the most demanded spaces are food shops and consumer goods.

“B block, which is mostly filled with clothing shops, and the basement and ground floors of D block, which is mainly groceries and consumer goods, are always crowded with customers.

“Demand for these spots is obviously high,” he said.

He said that in his opinion, most shop owners choose to rent because they cannot afford to invest in their business and a slice of property at the same time.

He had also noted a marked increase in shop occupancy but said it had been especially obvious over the past two years, even though business over this period had not always been good.

“Some areas that were once quiet are now thriving, which has pushed the rental prices for those spaces to double what they were previously,” he said, adding that the nearby transport networks helped to bring in customers.

U Tin Htet, the owner of a ready-made clothing shop on Yuzana Plaza’s ground floor, said the occupancy rates of shops and the plaza had increased greatly over the past three years. He added that rents vary from K80,000 to K300,000 a month depending on location.

“Most shop owners sign six-month contracts, which are good for them and the property owner because it allows rental rates to be adjusted and gives the shop owner options if they want to stop renting.

He said that in his opinion 48-square-foot shops usually sell for between K15 and K25 million.