Firms desert offices in Yangon’s Sule Square

YANGON, 27 May 2021: Tenants of a high-end office block in Yangon that the United Nations said was built on military-owned land have moved out or are reviewing their leases.

Prominent first on the move out include McKinsey, Coca-Cola and Reuters, according to the Business and Human Rights Resource Centre.

The activist group Justice for Myanmar last month called on commercial tenants of the Sule Square complex of offices and shops in the heart of Myanmar’s commercial hub of Yangon to stop indirectly supporting the army.

Photographer: Rory Daniel

See earlier report

“Sule Square has big-name tenants that continue to lease office space in the building, indirectly supporting the army,” Justice for Myanmar said in a report in which it identified 18 of the tenants.

Opened in 2017 near the historic Sule Pagoda, Sule Square was developed by a local affiliate of Hong Kong-listed Shangri-La Asia, which also manages the building and an adjacent hotel. The group routinely ignores media enquiries seeking comment on the project.

Shangri-La, which said in 2017 it had invested USD125 million in the development, declined to comment on Reuters’ questions about land ownership.

A spokesman for Myanmar’s junta did not answer calls from Reuters when it sought to verify details of the land lease deal independently.

But Justice for Myanmar said in its report that McKinsey & Company terminated its lease of serviced office space in Sule Square in early 2021, based on comments from Melissa Yeo, director of reputation and communications, Southeast Asia, at the consultancy, without elaborating.

In an emailed statement, Coca-Cola said it would not be renewing its lease when it ends in mid-June, citing “changing business requirements”.

When contacted for comment, a spokesperson for Reuters, which was not one of the companies named in the report, said it is not currently using its Sule Square office and was reviewing its tenancy. The spokesperson did not comment on the building’s possible military ties.

Singapore-based private equity firm Emerging Markets Investment Advisors said it had moved out of Sule Square after its lease ended in March, while Norwegian fertiliser firm Yara said it had started looking for alternative office space.

Norwegian state-owned telecoms firm Telenor said it had been aware of the military-owned land under Sule Square before it moved in, but it had picked the location due to factors such as safety. It did not elaborate on how it became aware of the ownership.

The World Bank, which also has an office in Sule Square, said it was “assessing the situation in Myanmar, according to internal policies and procedures”. It did not elaborate on its plans.

A spokesperson for German logistics firm DB Schenker, a subsidiary of state-owned railway group Deutsche Bahn, said it was “exploring several actions” with regards to its Sule Square office.

“Our first priority is the safety and wellbeing of our team,” the spokesperson said.

French container shipping firm CMA CGM said it was “conducting further investigations” and Canadian realtor Colliers International Group Inc said its Myanmar business was run by an independent franchisee and declined to comment further.

Japan’s Sony Corp said it previously had a representative in Myanmar, but its office had closed “due to the local situation” and is now sold only through distributors.