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"Assessment of economics" to determine Peninsula Hotel resumption

9 August 2023

Hongkong and Shanghai Hotels will base its decision to resume the Peninsula Hotel on an “assessment of the economics”, CEO Clement Kwok has told reporters.

According to a report from Nikkei Asia, Kwok said there were signs that the Myanmar economy is "regaining some normality," citing local property transactions being made by project partner Yoma.

However, he noted that suitable conditions for opening an international luxury hotel, including foreign tourist arrivals, were still not present under the current circumstances.

Nevertheless he said the “plan is certainly not to give it up. We still hold the land lease."

"This project has not been canceled by any means," Kwok said.

The 88-room hotel is a redevelopment of the colonial-style former headquarters of the Myanmar Railway Company.

Construction has been suspended since shortly after the military takeover. Work commenced in 2014 and was supposed to have been completed last year.

Kwok has previously stated that the project was 70% complete at the time of the suspension.

Hongkong and Shanghai Hotels recorded an impairment charge of 679 million Hong Kong dollars ($87m), or 85% of the project's book value, at the end of 2021.

Hongkong and Shanghai Hotels holds a 70% stake in the project, which is being developed in partnership with Yoma Strategic Investments and First Myanmar Investment, two listed companies under Serge Pun & Associates.

The hotel is part of the larger $700m Yoma Central complex, which also remains suspended as shareholders revise funding and construction plans.

We note that Yoma said in its latest financial report that it plans to resume construction on the project in H2 2023. 

It said it had revised the development plan, and will now complete the project on a phase-by-phase basis, instead of the initial plan to develop all buildings at the same time.

FMI said separately in its FY2023 financial report that work on the project would commence with residential apartments in the second half of this year, without providing any specifics.

The anticipated resumption of the Yoma Central project is notable as most large foreign-invested and government-backed projects suspended since the military takeover remained paused for myriad reasons including economic uncertainty, high construction material prices and reputational risks. Other notable projects that remain suspended include Smart & Eco City and Y-Complex.

Yoma Central project design with Peninsula Hotel located in former Myanmar Railway Company headquarters. Source: