Project prepares for soft opening

Mr Richard Mayhew shows off the sweeping views of Yangon from the top floors of the Centrepoint project. Pic: Lwin Maung Maung

TEN years after construction began on what is arguably one of the most prime pieces of real estate in Myanmar, the finishing touches are being put on the Centrepoint office tower for its soft opening later this year.

Located in the heart of Yangon’s commercial area opposite Mahabandoola Park, the mixed office, retail and recreation area is one-half of Centrepoint Towers – a US$65 million-and-climbing project by LP Holding Co., Ltd that will one day incorporate first-class office together with executive leisure space and a five-star hotel.

Joining the towers will be retail outlets and a large banquet hall, above which an open-air swimming pool and garden area will reside.

The project is set to reshape the surrounding area as LP Holding works to beautify the streets and park, as well as shake up the market for high-end office and retail space.

An artist's rendition of the finished Centrepoint Towers.

To be sure, the project has shown signs of being a colossal gamble since the project was mothballed following the Asian financial crash of 1997. Accor’s Sofitel, the key hotel operator, pulled out and the towers sat idle for nearly a decade before work resumed at the government’s behest 12 months ago.

Stories of hardship have steadily seeped out of a range of sectors in recent years and the future for large swaths of the economy remains unpredictable. Nonetheless, the project’s chief executive Richard Mayhew feels the time is right to open Centrepoint.

While the hotel is likely some time off as a replacement for designer-investor Sofitel is sought, the first tenants will be able to move in to the office tower this November. All office floors, should they be taken, could be ready by March, Mayhew told The Myanmar Times last Monday.

Mayhew is predicting that the dramatic rise in Myanmar oil and gas industry will fuel demand for high end office space.

“With the energy situation occurring, there’s a positive there. We can see the potential growth in demand for offices, and this is prime,” he said. “This is the best location for … a business centre.”

Interest has peaked this year in Myanmar’s oil and gas reserves with firms from China, India and Thailand bidding fiercely for access rights. South Korean and Malaysian energy firms are also heavyweights in Myanmar’s oil and gas sectors as well as global giants Total and Unocal.

“We’re certainly expecting some interest from the gas companies,” said Australia-born Mayhew, who is also general manager of the Mandalay Hill Resort Hotel, also owned by LP Holding Co., Ltd.

Office occupancy has been rising in Yangon for about three years, he said, which was putting pressure on the market to come up with more rental space.
“A lot of hotels have taken on commercial customers – they’ve just converted their rooms to offices. At some stage they’ll get such demand from tourists for those rooms they’re going to have to convert them back.”

Mayhew’s confidence in a strong rental market is backed by a study released last Monday by international real estate consultancy CB Richard Ellis that shows office rentals in Asia’s key cities increased sharply in the second quarter to June.

“Underpinned by the upbeat economic outlook, the second quarter of 2006 saw further acceleration in occupier plans to upgrade to superior quality office space,” the report said.

“Requirements for Grade A office space continued to outstrip market availability.”

While Yangon was not included in the study, in Singapore rates rose 7.1 percent in the quarter to June, Manila 7.0pc, Hong Kong 6.8pc and Bangkok 1.4pc, CB Richard Ellis said.

For Centrepoint Towers, location is everything. Sweeping views from the 22-storey towers take in the sea of tightly packed downtown shops and apartments below, the gently winding Yangon River and delta region, and the expanse of lush paddy fields just a stone’s throw over the waters in Dalah township.

Corner suites in the office tower give an intimate view down to the ancient Sule Pagoda barely 100 metres away.

The good news for prospective tenants is that most space – office and retail – is still available.

Out of 17 designated office floors, five have so far been taken, claim the owners, including the fifth, 19th, 21st and 22nd floors. Mayhew said he was not at liberty to disclose who the tenants were.

The fifth floor, which leads outside to the rooftop pool area between the office block and hotel, “will be anchored by a spa, yoga and aesthetics centre”, Mayhew said.

At the top of the building (beneath the helipads – there’s one on each tower) an executive entertainment area with dining, café and bar facilities is planned.
All told, there are some 15,500 square metres (166,840 square feet) of offices, with eight units to a floor from 65 square metres each. Monthly rates start at $12 a square metre.

The first three floors contain 36 retail units ranging from 12.4 square metres (134sqft) to 224 square metres (2412sqft).

This, Mayhew said, is comparable in quality and location only to Sakura Tower, farther down the street on the corner of Bogyoke Aung San Road, though Centrepoint trumps Sakura for panoramic views of the city and river.

Rates for retail are listed in promotional brochures as ranging from $30 to $45, but all are negotiable, Mayhew said.

He added that supermarket operators had expressed “strong interest” but did not suit the building’s profile.

“We’re looking at targeting speciality stores, in addition to airlines, travel agencies, high-end brand clothing, perfume, beauty products, gem stores, some food providers,” among other things, Mayhew said.

Telecommunications, he said, was crucial to the tower’s success.

While tenants at this stage are responsible for securing their telephone lines through Myanma Post and Telecommunication (MPT) themselves, there was the intention of having a wireless network throughout the building’s interior, Mayhew said.

“We’re looking at getting fibre-optic cables to the site for high-speed data transmission. That’s essential and more cost effective. We want to attract airlines and petroleum companies and they need that.”

Negotiations with MPT over telecom facilities are continuing but settling the matter was a priority, he said.

While every effort is being made to ensure business-people are well catered to, the launch of Centrepoint could also mark the rejuvenation of the surrounding area.

There are 85 basement-level car parks and Mayhew would like to see this extended to parking out front, which would accompany a general cleanup of the opposing stretch of Sule Pagoda Road and Mahabandoola Park.

“We’ve approached YCDC (Yangon City Development Committee) with a request to take all the front – we want to lease that area too,” Mayhew said. “We want to landscape it and dress it up, and in the end take a look at Mahabandoola Park.”

There was a need to “re-beautify” the area, he said. “We want to assist YCDC in doing that. … It’s a beautiful park, magnificent.”

Exactly when the 309-room five-star hotel will open remains uncertain, however.

If there was one regret, Mayhew said the company would have liked to focus more on serviced apartments, but the structure was too far along by the time the project picked up again last year.

“We really, seriously wanted to change part of the hotel to apartments,” he said. “They would have been million-dollar apartments.”

Centrepoint management have an office onsite or can be reached on (95-1) 245-214 or centrepoint-towers@mptmail.net.mm