MGS deepens push into property

Thein Tun, founder of MGS Group and chairman of Tun Commercial Bank, said in a recent interview that real estate is the company’s most profitable line of business, as it is now working on housing projects and building hotels and serviced apartments.
He refused to reveal investment ad revenue figures but was proud to say that his firm was among the top taxpayers in Myanmar. 
“At this point, we will keep our eye on serviced apartments and hotels. We plan to build a US$18-million (Bt600 million) property in Yangon after opening a 50-room hotel in Inle Lake,” he said. 
Both hotels would be completed in two years, and the Yangon property would accommodate more than 200 rooms, he said. 
On Thursday, the firm set foot in the hospitality business with the grand opening of Bagan Star hotel, a three-star property with 81 rooms. 
“We chose Bagan because it is the most active tourism destination in Myanmar due to its historical and archaeological value. Bagan attracts a lot of tourists, and we are happy to take part in making it developed further,” he said. 
“Actually, we intended to open it during the previous government term. 
“Unfortunately, it was one of the 25 hotels not allowed to open at that time, due to some requirements. So we are extremely happy to see it operational under the democratic government.”
The hotel charges $70 for deluxe rooms and $120 for suites, locals and foreigners alike. It has a workforce of nearly 50 employees, 90 per cent of whom come from Bagan and nearby villages. 
Thein Tun hired Australian experts to train the staff and manage the hotel. He expects 60 per cent occupancy this year, which is forecast to rise over time as the firm is focusing on marketing.
The firm needs to invest for five to 10 years to gain profits in the far future despite some improvements in the nation’s legal framework, he said.
“Tourism is yet to become a profitable business here. But in the long run, it will definitely be profitable. Just look at other Asean countries. 
“Thailand received more than 34 million tourists while Malaysia welcomed over 29 million, and Singapore 16 million last year. Even Cambodia received over 8 million tourists. 
“But we only received less than 4 million. That shows we have a lot of room for improvement,” he said. 
The tycoon seems fairly satisfied with the expansion of business under Myanmar’s first civilian government. 
The company remains profitable in its major businesses except airline and media. It holds 49 per cent of Carlsberg beer and 30 per cent of Pepsi. 
The firm’s microfinance business has over 40,000 customers nationwide, while Tun Commercial Bank has grown to 25 branches with over 850 employees across the nation.