Demand

International visitor arrivals to Yangon, a sizeable portion being leisure, have grown at a CAGR of 49.7% over the last three years and a CAGR of 15.2% over the past ten years.

International arrivals grew 46.1% y-o-y from about 0.6 million in 2012 to around 0.8 million in 2013.

YTD February 2014 statistics show a significant growth of 22.2% over the same period last year.

Thailand, Japan, China and Korea are the top four source markets for Yangon given their proximity and/or economic co-operation.

International Visitor Arrivals to Yangon

Sources: Myanmar Marketing Committee / JLL

Sources: Myanmar Marketing Committee / JLL

Source Markets (2013)

1 Hotel Market Snapshot l Yangon, Myanmar Hotels & Hospitality Group

Market Snapshot l Hotels & Hospitality GroupMay 2014

YangonHotel Market Update

Yangon: 2014 & Beyond

Thailand 14.5%

China 6.8%

Malaysia 4.7%

Korea 6.8%

Japan 8.3%

USA 6.2%France 4.1%

Singapore 4.8%Taiwan 3.8%

UK 3.9%

Others 36.1%

Visitor Arrivals Annual Growth

-30%-20%-10%0%10%20%30%40%50%60%

0100,000200,000300,000400,000500,000600,000700,000800,000900,000

Annu

al Gr

owth

Numb

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f Visi

tors

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

YTD

Feb-

13

YTD

Feb-

14

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

2 Hotel Market Snapshot l Yangon, Myanmar

Source: JLL Research

Project Location Rooms Rating Opening

Novotel Yangon Max Pyay Road 366 4-star 2014

Hilton Yangon Kyauktada 300 5-star 2014

Sedona Hotel (Phase-2) Pagoda Road 420 4-star 2014

Novotel Inle Lake Myat Min Inle Lake 121 4-star 2014

Pullman Yangon Myat Min Inle Lake 300 5-star 2015

HAGL Hotel Pagoda Road 480 5-star 2015

Pan Pacific Hotel Shwedagon Pagoda Road 348 5-star 2016

Daewoo Hotel Inya Lake 150 5-star 2016

Total 2,485

0200400600800

1,0001,2001,4001,6001,8002,000

Numb

er o

f Roo

ms

Luxury Upscale Midscale / Economy

Future Hotel Supply in Yangon

Source: JLL

Supply

Hotels According to Ministry of Tourism, there were 9,163 rooms in

Yangon as of June 2013. Out of these, only around 2,000 rooms are considered to be of international standard.

There are 4,518 rooms expected to enter the Yangon market over the next five years out of which some 95% can be categorised as international standard. Once operational, total supply of international standard rooms in Yangon will more than double.

Majority of the upcoming supply comprises of Hotels in the upscale and luxury segments.

Serviced Apartments

Supply of international standard Serviced Apartments remains limited with no branded property currently operational in Yangon.

Most of the existing unbranded apartments are currently running at almost full occupancy indicating a strong long-stay demand in the market.

The Sebel Yangon Myat Min from Accor is expected to be the first internationally branded Serviced Apartment to enter the market in 2015.

Source: JLL Research

Project Location Keys Opening

Shangri-La Residences (Phase-II) Kandawgyi Lake 120 2014

The Sebel Yangon Myat Min Inle Lake 100 2015

Daewoo Serviced Apartments Inya Lake 200 2016

Somerset Kabar Aye Yangon Pagoda Road 153 2018

HAGL Serviced Apartments Pagoda Road 1,800 2018

Pan Pacific Serviced Apartments Pagoda Road NA* 2018

Total 2,373

Key Hotel Projects Under Construction

Future Serviced Apartment Supply

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Hotels & Hospitality Group 3

Outlook

Tourist arrivals to Yangon are expected to continue growing aided by the expansion of existing International Airport and construction of the new Hanthawaddy International Airport at Bago (80 km north of Yangon). The new airport is expected to start operations by 2018.

The News

Key Recent Additions during 2013 and Q1 2014 Shangri La Residences (Phase I), 120 keys Rose Garden Hotel (Phase I), 57 keys Avenue 64 Hotel, 34 keys Aung The Pyay Hotel, 35 keys Sky Star Hotel, 119 keys

Major Renovations / Re-brandings Sule Shangri-La (erstwhile Traders Hotel Yangon), 484 keys, opened in April 2014. Best Western Green Hill (erstwhile Green Hill Hotel), 189 keys, opened in 2013.

Notable Management Agreement Signings Novotel Inle Lake Myat Min Pullman Yangon Myat Min The Sebel Yangon Myat Min Somerset Kabar Aye Yangon

Trading Performance

Ever since Myanmar embarked on its journey to Democracy in 2011, Yangon has seen a remarkable improvement in Hotel market performance as a result of lodging demand outpacing supply.

Occupancy for the upscale and luxury segments increased from 45.8% in 2009 to a record 80.0% in 2013, while ADR went up almost 300.0% from USD 40 in 2009 to USD 157 by the end of 2013. As a result, RevPAR grew over 7 times to USD 126 during the five year period.

Despite supply additions in 2013, the upscale and luxury segments witnessed a 23.9% increase y-o-y in RevPAR led by a 6.0% increase in occupancy and 15.0% growth in ADR.

Due to supply additions planned in 2014, we estimate occupancy to remain stable at 80%, while ADR grows to USD 173, up 10% from 2013, resulting in an overall RevPAR growth of 10% in 2014.

Trading Performance Upscale and Luxury Segments

Source: Market Research / JLL E-Estimate

Occupancy (%)ADR (THB) RevPAR (THB)

A Tourism Master Plan for Myanmar was unveiled in June 2013 by the Asian Development Bank (ADB) in collaboration

with the Norwegian Government which disclosed 39 develop-ments involving improvement of the Bagan river port and initiatives worth USD 500 million that includes plans to grow international visitor arrivals, improve tourism education and identification of USD 44.5 million in new training and partnerships.

We see a strong opportunity for branded midscale Hotels of international standard since the segment remains untapped, with the majority of future supply being concentrated towards upscale and luxury segments.

Going forward, due to market seasonality trends, we anticipate occupancy to stabilise at current levels while growth in ADR will begin to moderate in the near future due to an increase in supply.

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2009 2010 2011 2012 2013 2014E

www.jll.com/hospitality

COPYRIGHT JLL 2014. All rights reserved. The items in this publication have been compiled from the various sourcesacknowledged. The information is from sources we deem reliable; however, no representation or warranty is made to the accuracy thereof.

About JLLs Hotels & Hospitality GroupJLLs Hotels & Hospitality Group serves as the hospitality industrys global leader in real estate services for luxury, upscale, select service and budget hotels; timeshare and fractional ownership properties; convention centers; mixed-use developments and other hospitality properties. The firms 300 dedicated hotel and hospitality experts partner with investors and owner/operators around the globe to support and shape investment strategies that deliver maximum value throughout the entire lifecycle of an asset. In the last five years, the team completed more transactions than any other hotels and hospitality real estate advisor in the world totaling nearly US $36 billion, while also completing approximately 4,000 advisory, valuation and asset management assignments. The groups hotels and hospitality specialists provide independent and expert advice to clients, backed by industry-leading research.

A Tourism Master Plan for Myanmar was unveiled in June 2013 by the Asian Development Bank (ADB) in collaboration

with the Norwegian Government which disclosed 39 develop-ments involving improvement of the Bagan river port and initiatives worth USD 500 million that includes plans to grow international visitor arrivals, improve tourism education and identification of USD 44.5 million in new training and partnerships.

We see a strong opportunity for branded midscale Hotels of international standard since the segment remains untapped, with the majority of future supply being concentrated towards upscale and luxury segments.

Going forward, due to market seasonality trends, we anticipate occupancy to stabilise at current levels while growth in ADR will begin to moderate in the near future due to an increase in supply.

For inquires, contact:

Consulting and Research Investment Sales

Andrew Langdon Jonathan Ottevaere Mike Batchelor Executive Vice President Vice President Managing DirectorThailand & Indochina Thailand & Indochina Investment Sales, AsiaAndrew.Langdon@ap.jll.com Jonathan.Ottevaere@ap.jll.com Mike.Batchelor@ap.jll.com+66 81 844 2049 +66 81 901 2901 +66 81 984 8970 (Bangkok)