FIVE THINGS TO EXPECT FROM PHILIPPINE REAL ESTATE OVER THE NEXT FEW YEARS
With the Philippines emerging as one of Asia’s bright spots and a darling of international investors, it is clear to say that the country’s real estate market is experiencing its best years not seen since the onset of the Asian financial crisis in 1997. Even the global downturn of 2008 did little to dampen the country’s exuberant business climate.
Although it seems that the Philippine real estate market is at its best time yet, more opportunities are expected over the next few years. Lamudi lists down five of these.
1. The Rise of Real Estate’s Sunshine Industries
Although the residential sector is experiencing its most vibrant years, there are still other segments that could provide plenty of opportunities. One of these is properties intended for retirees.
According to Cely Delos Santos, a licensed real estate consultant and vice president of full-service consultancy firm REHub, properties catering to wellness and medical tourism and estates for retirees are considered sunrise industries that promise huge growth over the next few years, especially now that the Philippines is fast becoming a favorite retirement option among foreign retirees and returning Filipinos.
2. Condos to More Than Double over the Next Five Years
A report published by JLL Philippines shows that approximately 168,650 condominium units are expected to enter the market until 2019. This is more than the existing stock of about 161,730 units.
According to Jojo Salas, Head of Research at real estate consulting firm Pinnacle, although many of these units (especially the mid-end ones) were unsold during the pre-selling stage, a huge chunk of them are being built by the market’s big players who will easily absorb them upon completion.
“These condo units will most likely be turned by these developers into rental properties, which will be extremely favorable to end-users, as they will provide more in-city living options to Metro Manila’s employed populace and students.”
3. Tourism Boom
It will be an exciting year for Philippine tourism in 2015 with the opening of an integrated resort in Metro Manila’s bay area and several hotel brands, including properties by Shangri-La and Hyatt in Bonifacio Global City and a Conrad hotel in the Mall of Asia Complex.
But perhaps the most exciting of these developments is Melco Crown’s City of Dreams Manila, an integrated resort casino comprising three hotels (Hyatt, Crown Towers, and Nobu Hotel). The latter’s Macau connection is expected to bring planeloads of Chinese high rollers to the resort’s casinos.
Thanks in part to the Department of Tourism’s (DOT) very successful marketing campaigns, tourist arrivals jumped 9.56 percent in 2013 to 4.68 million. The DOT announced that it is targeting at least six million for 2014.
4. Development Will Spread Outside Metro Manila
The biggest challenge for real estate companies right now is finding large land that can be developed within Metro Manila. According to Salas, most land available is quite small—1,000 or 2,000 square meters at most—which are suitable only for single buildings or one-off projects. “Most developers, especially the big ones, do not like one-off projects, unless the location is very attractive. A good size would be one hectare.”
However, this presents an opportunity, as we will see more developments in Metro Manila’s neighboring provinces. For example, Megaworld Corp. has just announced its Tanza project in Cavite, while luxury developer Century Properties will duplicate its successful Azure project in San Fernando, Pampanga. A direct result of these spreading of developments will be the improvement of infrastructure in these areas, which brings us to the next item in this list.
5. Metro Manila’s Infrastructure will improve considerably
Salas said that the government has been doing a good job in projecting this growth, which is a reason transport infrastructure around the metropolis is being improved. In anticipation of this growth, several infrastructure projects have been completed over the last few years, including the 14-kilometer Cavite-Manila Expressway connecting the Manila Bay area to Cavite.
Soon to be completed also are the Cavite-Laguna Expressway and the NLEX-SLEX connector road. The latter is a 13.4-kilometer elevated expressway that will reduce travel time from Alabang to Balintawak from two hours to 15 minutes. Other road construction projects in the pipeline include the second phase of the airport expressway, the EDSA–Taft Avenue flyover, the Bonifacio Global City to Ortigas Center link road, and the LRT 1 North and LRT 2 East extension projects.
These projects are not only opening up new areas for development and providing opportunities for Metro Manila’s neighboring provinces, they are also helping decongest the metropolis by spreading development outwards.