Part 3
IT’S amazing how just a little tomorrow can make up for a whole lot of yesterday. However, in order for us to really take charge of our future, we need to have an idea of what’s in store for us in the future so we can seize opportunities that it may bring and prepare for any challenges that may also come our way.
Over the last couple of weeks, I’ve featured some insights on the possible real-estate trends for 2016 from the point of view of experts and thought leaders in the field, in the hope of painting a clearer picture of the property development landscape in the coming year.
Appropriately enough, my column today is my last for this year, and is the last installment of a three-part series, featuring what property development insiders believe will be the defining characteristics of the real-estate industry in 2016. I intend to wrap up an exciting year by looking ahead and knowing what’s to come.
Sheila Lobien, national director, JLL Philippines
Sheila LOBIEN of JLL Philippines believes that the main thrust of commercial buildings in 2016 will be to go “green.” Although green initiatives in property development are already standard in developed countries, green technology is basically still in its infancy here in our shores.
In this regard, Sheila said, “LEED[Leader in Energy and Environmental Design] certification now is very important and occupiers are now looking for that. Therefore, landlords and developers will be incorporating green technology in the design and planning of their developments more in the coming years. In fact, there are already several LEED or green buildings today.”
Just like many of her peers, Sheila believes that mixed-used development will continue to thrive in 2016. We will, therefore, be seeing more mash-ups of commercial shopping areas, offices, serviced apartments and hotels in one building, like Shangri-La at The Fort, The Grand Hyatt Manila Residences in Bonifacio Global City and Marco Polo in Ortigas.
“Township developments will be all over, too. We will see more malls, condos and office spaces in one area—the live, work and play concept,” Sheila noted.
Jacqueline van Den Ende, founder and managing director, Lamudi Inc.
Jacqueline van Den Ende is the founder and managing director of Lamudi Inc., which runs a highly successful online property finder. One of the things she foresees in the coming year is the decentralization of development from Metro Manila to nearby growth areas. “Developers are looking to go provincial due to the increasing scarcity of available land. A couple of very big projects are being launched, especially in Cebu and in other provinces,” Jackie stressed, while acknowledging the continued strength of the market in Metro Manila.
“The office market in Manila will continue to be very strong. We see a lot of strata-titled office developments launched this year, which I think will be huge in 2016. Metro Manila’s office market is tight with very few properties coming online. This is especially true in non-business-process outsourcing (BPO)-type offices. This presents an opportunity for investors,” she said.
“In Makati, the supply of offices is really tight, which will push rental rates higher as vacancy rates further decline. The vacancy rate across all three office grades is predicted to be at 1.25 percent, while rental rates are seen to increase 4.49 percent [Premium]; 4.97 percent [Grade]; and 7.82 percent [Grade B] year-on-year to the second quarter of 2016 [Colliers data].”
She also sees the slowing of rental growth in the midrange residential market in certain areas due to a temporary mismatch between demand and supply. “The market, however, is self-correcting—fewer HLURB licenses in midrange residential developments were issued—whereas demand is expected to catch up,” she asserted.
John Aguilar, president and executive producer, StreetPark Productions Inc.
John Aguilar, the youthful producer of the groundbreaking PhilRealtyTV, believes that 2016 will be a year of cautious optimism for both developers and buyers. “By this time, developers have already assessed which markets to continuously pursue and which ones to slowly let go of due to oversupply,” John noted.
“Buyers, on the other hand, because of their plethora of options will rely more and more on the Internet not just to find properties but to crowdsource what people say about the projects that pique their interest or the developers that build them,” he added.
“There will most likely be a slowdown in the high-end condominium market, but a resurgence in house and lot building and renovation, with affluent young families building their first homes or renovating existing ones to suit their generation’s taste and lifestyle.
“Numerous foreign home brands will, likewise, enter the Philippine market, eager to stake their share in the condo and home interior segments. Accommodation booking sites such as Airbnb will, likewise, make homeowners assess the viability of earning incremental income from their investments through the Internet, and developers will start to offer ways to regulate or manage the properties to protect the interests of the unit owners, renters, and other residents,” he said.
Iris Josef, vice president for Business Development, Cebu Holdings Inc.
Iris Josef of Cebu Holdings shared her own thoughts on what’s going on in the Cebu property development market. On the overall, Iris believes that 2016 will be a good year for the Cebu property development industry, with lots of opportunities anchored on the fact that the province has tremendous potential for growth.
Iris believes that expansion north of Cebu City will focus on Mandaue with lots of things currently going on—the development of medical facilities and the spearheading of retail and commercial developments. She also believes that Cebu’s southern expansion will start at the South Road Properties (SRP). “I think this area has a lot of potential, although probably this will take a few more years to stabilize,” she stressed.
“While the northern and southern expansions are exciting developments for 2018 onward, Cebu City will continue to grow and for 2016 will still be where most of the market will locate, do business, reside, rent, and shop,” Iris asserted.
”With the rapid growth and the clamor of Cebuanos to solve traffic and infrastructure issues, 2016 will hopefully be the year that these are addressed or at least are attempted to be addressed,” she concluded.
The coming year
I must say that the past year has been an exciting one for property development. Fresh residential and commercial developments have broken ground in and around the Metro, the thriving BPO sector has sustained its demand for more work spaces, and new initiatives in online property marketing—like Lamudi and Zipmatch—have contributed greatly to a burgeoning industry.
However, from the looks of it, the coming year will be equally exciting, yet, challenging at the same time. Based on what we gathered from our real estate thought leaders, 2016 will give us so much to look forward to—a heightened awareness of green initiatives, innovative development features, more big townships and small- and medium-sized mixed-use developments, and more residential and commercial projects outside of the metropolis.
In the meantime, I would like to take this opportunity to greet everyone a prosperous new year and may the coming year bring countless blessings to you and your family.