Forbes Asia - October 2018

SPECIAL ADVERTISING SECTION

9 The Philippines

While the country's economy moves at a
more settled pace, the Philippine real estate
sector is still surging to impressively giddy
heights.
The development momentum is pal-
pable in the capital of Manila, which boasts
the third-lowest vacancy rate among the 20
prime office markets in the region. Estab-
lished business districts such as Makati
and Bonifacio Global City are practically
saturated, thanks to growth in outsourcing
and online gaming locators. Rents continue
to rise backed by strong leasing activity.
Property consultancy Colliers International
expects demand to increase by about 6%
annually over the next three years, while
Knight Frank projects that by 2020, Manila
will post 19% growth in prime office rents,
overtaking Bangkok, Brisbane, Hong Kong
and Singapore.
Growth in emerging areas has sped up,
attracting corporates on the lookout for
competitive alternatives to Manila. “Top
developers are investing in Northern and
Central Luzon, developing commercial
centers, industrial parks and townships, all
of which are projected to appreciate due
to the aggressive road expansion plans of
the Philippine government,” says Wilfredo
Placino, president of Clark Global City, a
massive 177-hectare “center of innovation”
developed by Udenna Group.

Inux of Investments

While Filipino overseas workers have tradi-

tionally driven real estate sales, international

buyers are now increasingly snapping up

properties, particularly for the mid-range

segment and up. Local developers have

reaped major earnings by partnering with

foreign firms to tap this market. This strong

showing extends to leasing in the secondary

market, with major business districts posting

low vacancies across segments.

Affluent locals are investing in luxury

properties as a hedge against stock market

volatility. The Bangko Sentral ng Pilipinas

Residential Real Estate Price Index indi-

cates condominium prices in Metro Manila

rose 3.3% in the first quarter of 2018 from

a year earlier. Upward mobility and popu-

lation shifts are also expanding the num-

ber of end-users for premium residential

properties.

Ayala Land’s market-leading luxury brand

Ayala Land Premier has been riding this

momentum, posting one of its strongest

sales figures in 2017 at more than PHP37

billion (US$686.5 million). “With luxury

property prices in the Philippines relatively

affordable compared to its Southeast Asian

counterparts, the premium and luxury seg-

ment provide solid value in terms of invest-

ment,” says Mike Jugo, head of Ayala Land

Premier.

Vista Land Chairman Manuel Villar Jr.,

whose property firm ended 2017 with

almost 400,000 homes built across the Phil-

ippines in 133 cities, also remains bullish on

the country’s real estate segment. “There’s

robust demand for our residential business,

and sustained growth in our leasing busi-

ness. This is propelled by the steady rise

in Filipinos’ disposable income, overseas

Filipino remittances, sound macroeco-

nomic fundamentals and the government’s

drive to accelerate economic activities and

infrastructure development outside Metro

Manila,” says Villar.

As the country evolves, it has repeatedly

proven that opportunities abound, and it is

likely we are still just on the ground floor of

its ascent.

WEB DIRECTORY

Ayala Land Premier

http://www.ayalalandpremier.com

International Container Terminal

Services, Inc. (ICTSI)

http://www.ictsi.com

SM Investments Corporation

http://www.sminvestments.com

Udenna Group

http://www.udenna.ph

Vista Land & Lifescapes, Inc.

http://www.vistaland.com.ph

Rental rates in Bonifacio Global City, Metro Manila remain among the most competitive in Asia.

Skyrocketing demand is putting the Philippines on the region’s real estate forefront.

PHILIPPINE PROPERTY FLIES HIGH