AS the first half of 2019 already has concluded, studies have shown the bullish prospects on the Philippine real-estate industry for the rest of the year.
This is apparent on the upbeat performance from January to March as shown in the latest report of Lamudi, in partnership with Jones Lang LaSalle (JLL) Philippines, dubbed “The Digital Property Seeker Series 2019: 1st Quarter Metro Manila Market Overview.”
According to JLL Philippines, the real-estate market in Metro Manila is expected to keep on flourishing in Q1 2019 amid the headwinds that the country’s economy experienced in 2018.
“The Philippine economy started to pick up in terms of consumer demand with the cooling of the March 2019 inflation rate. Likewise, the business environment has been steady, supported by the continuous entry and expansion from investors. This is evident in the office sector with supply increases and continuous rental growth in [the first quarter of 2019],” it noted in the report.
The property sector’s segments—office space, residential and retail—in the metropolis continue to encounter heightened demand, alongside those in budding real-estate hot spots such as Davao and Pampanga.
During the first three months of the year, strong need for office spaces came from offshore and outsourcing businesses, per the JLL Philippines. They partook 51 percent of the total rental volumes during the period.
Online gaming firms, also known as Philippine Online Gaming Operators or Pogos, accounted for a sizable amount of 27 percent that were leased in Q1. Flexible workspaces also spurred the demand for offices, most of which are multinationals that have built their first hubs in central business districts across the metropolis but have since then expanded to other CBDs.
Based on data from Lamudi, 29 percent of its users inquired about office spaces in Metro Manila in Q1 2019, 44 percent asked about office-related properties in Pampanga and 36 percent zeroed in on Davao del Sur.
Around 90 percent of the questions generated were about leasing office spaces instead of buying them outright. The leads and actual inquiries on office spaces increased by 38 percent versus the fourth quarter of last year.
Supply-wise, an aggregate of 173,600 square meters of office space were added to the total inventory during the first three months of the year, according to JLL Philippines. Most of which are in Makati City. Total office space classified as grade A to prime in Metro Manila now stands at 8 million sq m.
On a monthly basis, those in Makati City commanded the highest rental fee. The surge of investors from mainland China, especially those engaged in Pogos, has driven the growth of commercial office activities in both Parañaque City and Pasay City, where the Bay Area is located.
The JLL Philippines reported that high net-worth individuals like expatriates—many of which are key executives—remained as the key drivers for luxury residential condominium purchases. This is proven by the rising number of property developments in Makati and Bonifacio Global City in Taguig.
Chinese tenants from online gaming field also propelled the demand for residential condos, particularly in the Bay Area. JLL Philippines said: “The influx of Chinese investors propped up residential property prices in the Bay Area with investors buying multiple units, with some leasing out to employees from Pogos.”
The rental market for the mid-level segment of vertical housing projects, on the other hand, were mainly driven by Filipinos working in CBDs. Makati dominated the highest lease value, followed by Pasay City. From January to March of this year, an additional supply of 5,400 residential condo units in Metro Manila brought the overall estimated stock to 347,200 units.
Lamudi reported that 17.33 percent of property hunters inquired to them for residential condos in Metro Manila during the quarter in review. Meanwhile, 42.74 percent did require on condos in Davao del Sur and 38.69 percent zeroed in on Pampanga.
Almost three-fourth of the inquiries is about renting residential condos rather than purchasing them. When it comes to page views, nearly 43 percent are searches for residential condos up for sale. Compared to the last quarter of 2018, the leads and actual inquiries about vertical housing projects rose by about 35 percent in Q1 2019.
Vacancy rate was sustained at 3.7 percent in the first three months of the year. Per the international property specialist, The Shops at Ayala North Exchange added around 10,000 sq m of retail space during the time, thus, bringing the aggregate supply to 6.5 million sq m.
The country’s real-estate industry is projected to remain steadfast in 2019, with the first quarter movements “creating a tiny ripple in supply completions followed by the coming waves of development across all sectors,” JLL Philippines said.
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