THE Philippine property sector is poised for another growth in 2018 as prospects remain stable amid the latest strong showing of the country’s GDP.
“Philippine real-estate market is sustaining its momentum with the country’s bullish economy, young demographics and consumption-driven market,” Santos Knight Frank (SKF) Chairman and CEO Rick Santos said in a recent news briefing held in Pasay City.
“Sound macroeconomic indicators continue to render the Philippines as one of the strongest performers among the emerging economies in Asia,” Santos added.
He also pointed out that the company remains bullish on long-term growth prospects for Manila’s real-estate market as the office, retail; residential and industrial sectors continue to expand
Manila’s office rental growth reached 4.3 percent year-on-year as vacancy rates remain at a very healthy level with 220,000 square meters (sq m) of additional office stock in the third quarter.
In the third quarter, Santos said more than 220,000 square meters of additional gross leasable area (GLA) has been added to the total office stock. Most of the new supply was already precommitted and taken up immediately. The total Prime and Grade A office supply has reached more than 4.5 million square meters.
Vacancy in Metro Manila increased to almost 5 percent in the third quarter of the year due to the large volume of additional stock introduced during the quarter.
Meanwhile, Santos said prices across residential segments have risen, with the luxury residential posting the highest at 28 percent year-on-year. More than 52,000 residential units are slated for turnover before the end of 2018. Office take-up or net absorption for the whole of 2017 is expected to reach above 600,000 sq m. He said that more than 3.7 million sq m of GLA is projected to be available in the next five years. Meanwhile, SKF expects a total of 946,782 square meters of leasable office space to be added to the current supply by 2018. Around 409,377 sq m, or about 76 percent of the total upcoming supply will be in the Bonifacio Global City (BGC). He said approvals of Philippine Economic Zone Authority projects are expected to increase following a more positive outlook in the information technology and business-process management industry in the coming periods.
Despite the global rise of e-commerce, the Philippine retail sector remains an attractive investment opportunity and is set to add 630,000 sq m in the next three years. That expansion is crucial for the industrial real-estate sector, where the need for warehousing and storage space continues to drive demand. Santos said there has strong investor activity in the residential sector buoyed by the demand for residences accessible to office, staycation and influx of tourists.
Sales of condominiums in Metro Manila was dominated by mid-end projects, which comprise about 64 percent of the total stock. This is followed by high-end, affordable and luxury projects with 24 percent, 10 percent and 2 percent, respectively.
SKF reported overall percentage sold in Metro Manila rose to 85 percent from 79 percent a year ago. Moreover, prices have increased across segments year-on-year and are now at P57,000 to P89,000 per meter for affordable (7-percent change); P78,000 to P176,000 per sq m for mid-end (6-percent change); P108,000 to P187,000 per sq m for high-end (4-percent change); and P182,000 to 350,000 per sq m for luxury (28-percent change). “A fast-growing metropolis, Metro Manila’s property market is leading vis-à-vis many other Asian cities. Manila today is Hong Kong or Singapore 30 years ago,” Santos pointed out.
“We’ve seen a vibrant real-estate market in 2017 driven by strong investment inflows into the country which triggers a positive ripple effect across all property sectors. We expect an even better market in 2018 as infrastructure projects go into full swing and create a more conducive business environment,” Santos said.