By Ayen Infante
07/03/2008 [ tribune.net.ph ]
Property sector adviser CB Richard Ellis (CBRE) said prospects on the local real estate industry remain bright compared to other key cities in Southeast Asian region.
In a speech delivered at the 2nd day of an International real estate expo held at the Hong Kong Convention and Exhibition Centre last June 21 to 22, CBRE Philippines general manager Trent Frankum spoke on the topic “The Philippines — the hottest market in Southeast Asia” to reflect the firm’s view on the country’s property sector.
The two-day event showcased global real estate market opportunities and featured property experts and investors from global companies headquartered in Asia, Australia and the UK.
“Investment opportunities in tourism, infrastructure, mining, and real estate remain high in the Philippines,” Frankum said.
“Foreign investors are looking at the positive effects of the stable peso, increasing tourist arrivals, the business process outsourcing (BPO) boom and the positive effect of overseas Filipino worker dollar remittances into the country,” he said.
Tourist arrivals last year broke the two-million mark for the first time since 2004, with arrivals rising to 3.091 million.
CBRE is expecting new markets, such as Russia, Middle East, China and Korea, to help in sustaining tourism growth. CBRE is also projecting arrivals to increase to 3.4 million this year that is estimated to generate $5.8 billion in global tourism receipts.
Frankum said hotel room occupancy rates rose to 73.06 percent in 2007 from 71.95 percent in 2006.
“New hotel and resort developments are currently in strategic business locations such as Makati City, Fort Bonifacio and the Bay Area, as well as top tourist destinations such as Cebu and Boracay, further enhancing industry prospects,” Frankum said.
Among these new projects include the $153 million Kingdom Hotel, a combined hotel and residential condominium that will rise in Makati City.
“We expect 18,143 units to be provided from 28 upcoming residential condominiums in Makati that are targeted for completion between 2008 and 2013. Likewise in Fort Bonifacio, 11,652 units are expected to come on the market from 33 residential condominiums being constructed from 2008 to 2012,” he said.
The offshoring and outsourcing (O and O) boom in the Philippines also has created new opportunities for the real estate market, Frankum said.
“Major investors and businesses are looking at the Philippines because it is one of the largest English-speaking nations in the world and has 33.5 million Filipinos as workforce,” Frankum noted.
As a result, major multinational BPO operators are currently expanding their presence in the Philippines, Frankum added.
He cited Accenture as an example, which has already leased 1.3 million square feet for its local offices.
Other companies, such as Teletech, have built facilities outside Metro Manila. All of Teletech’s six facilities are located outside the capital Metro Manila.
Other major financial companies such as HSBC, Citigroup, and JPMorgan have been expanding Philippine sites of their respective customer support operations. HSBC currently has four locations, which totals to 859,200 square feet, and plans to open more sites. Citigroup and JPMorgan, on the other hand, have 214,812 and 107,400 square feet of space leased respectively. “Third party BPOs are not stopping in their expansion, with a handful such as Convergys, IBM, Sykes, TeleTech and PeopleSupport already pursuing and have secured more sites in the country,” Frankum said.
Other major O and O service providers continue to develop sites in Metro Manila and Metro Cebu. According to CBRE research, a total of 731,871 square meters of property in Metro Manila has been earmarked for new O&O facilities this year, with 189,614 square meters already pre-committed before commencing construction. “Offshoring and outsourcing will continue to drive demand for real estate, particularly in the office space market,” Frankum said.
CBRE also specializes in investment sales, commercial and industrial leasing, asset management, property management, project management, facilities management and research and consultancy.
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