Five years ago, Singaporean Daphne Teo was an investment banker at Goldman Sachs when her father, businessman Teo Cheng Kwee, founder of investment management and holding company Sapphire Corp, offered her a proposition. He had identified a site in Myanmar that he thought would interest her.

The 362,000 sq ft site is located along the millionaires’ row on Yankin Road, in Yangon. Teo senior, together with his Myanmar business partner, formed a joint venture (JV) to buy the 70-year leasehold site from the government.

“My dad told me it was going to be really interesting,” recounts Daphne, 33. “I visited the site and went through the plans and thought so too.” That was when the Stanford University graduate decided it was time to quit banking and try her hand at being a developer in Myanmar. By 2012, Daphne was chief investment officer of D3 Capital, the Teo family’s privately held investment company.

The JV company developing the site is called Golden Land. The Myanmar partner in the JV is travel agency Nature Link Travel and Tours. Daphne’s stake in the joint venture is via an investment company called Uni Global Power.


Aerial view of D3 Capital’s maiden mixed-use development, Golden City, in Yangon


Teo: My dad told me it was going to be really
interesting. I visited the site and went through the
plans and thought so too. That was why I came out to join him.


Maiden development — Golden City
Under development on the site is a mixed-use project called Golden City, which has a gross development value of US$700 million ($947 million) and a gross floor area of 3.8 million sq ft. When completed in 2018, it will have nine 33- storey residential blocks with 1,439 apartments; a 30-storey commercial block with retail on the first four levels and offices on the next 11 floors; and the upper 14 floors housing a 450-room five-star hotel or serviced apartments.

Construction is currently underway, with the first four residential blocks already topped out. Foundation works for the remaining five residential towers have just begun, says Daphne.

The first four residential towers of Golden City were launched in 2014 and 80% have been sold to date. The next three residential towers were launched in 2015 and 60% have been taken up. The majority of the units purchased were one- and two-bedroom units as most of the buyers are investors, she adds.

To date, all the buyers are Myanmar people. Foreign buyers interested in securing property in Golden City were allowed to reserve their units when the first two phases were launched.


Lobby area of the residential block of Golden City


Relaxation of foreign ownership
However, foreigners will be able to invest in property in Myanmar soon. In January, Myanmar’s union parliament passed the draft of the Condominium Law, which will allow foreigners to buy up to 40% of the units in a condominium block. The law is expected to take effect from July.

However, Tan Kok Keong, CEO of real estate consultancy REMS Advisors, cautions that foreigners should wait until the details are spelt out before investing. Tan used to run a real estate consultancy company in Yangon for a year. According to him, currently, it is not clear what exactly a foreigner can buy, and whether he/she is allowed to buy property for investment or only for his/her own use. What needs to be clarified is also the exit strategy: who can they sell their property to, and how long they have to hold it before they can sell it.

Once these issues are cleared, foreigners will jump in, says Daphne. The potential for capital appreciation is huge as multinational corporations will start to set up their offices in Myanmar and lease apartments for their employees, she adds. The average price for the residential units in Golden City is US$300 psf, which means absolute prices will range from US$160,000 for a 517 sq ft, one-bedroom unit to US$590,000 for a 1,991 sq ft, four-bedroom unit.

When the rules allowing foreign ownership are implemented, she reckons prices will soar. Therefore, she intends to raise prices for the units in the third phase.

Owing to a shortage in quality apartments and condominiums in Yangon, investors can achieve rental yields of up to 15% today. “ Going forward, there is a lot of mid-[range] to luxury residential units coming on stream,” says REMS’ Tan. “I think yield will come down to a norm a lised state of 7% to 8%.”


The one- to four-bedroom residential units in phases one and two were sold for between US$160,000 and US$590,000


This article appeared in the City & Country, Issue 726 (May 2, 2016) of The Edge Singapore.