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Real estate industry still seen surging

Published on 23 October 2012 [ manilatimes.net ]
Written by MADELAINE B. MIRAFLOR

IN the light of the growing Philippine economy, the local real estate industry is also seen booming as investments increase and remittances inflows remain positive.

“Stable economic growth, rising investments and inflows from remittances, and a prospering offshoring and outsourcing sector have been beneficial to the local property market,” said real estate consultant David Leechiu, country head of international property consultancy Jones Lang LaSalle Leechiu.

Leechiu, in a recent briefing, presented this year’s market overview for the real estate industry.

“Demand for high-end offices and residences is expected to continue throughout the year,” he said.

Leechiu also noted that there are many properties being developed into upscale offices and residential high-rise towers in multiple districts in Metro Manila. It was also mentioned in the presentation of Leechiu that upscale office space in several developments in the country is in demand.

“As office rents in Manila continue to be very competitive in contrast to its Asian counterparts, the Philippines continues to attract global businesses that set up operations in the country to take advantage of cost efficiencies and labor competitiveness,” the presentation cited.

The offshoring and outsourcing sector, in particular, continues to demand grade A office space. The consistent year-on-year increase in office space take-up comes in spite of country risk issues in the past decade.

Makati City, on the other hand, remains to be the central hub for business despite the growing numbers of central business districts in the country such as in Bonifacio Global City, Ortigas, North Triangle and Cubao, among others. According to Leechiu, Makati remains the prime business capital in the country, with almost half or 46.2 percent of companies taking up office space in the area.

The entry and expansion of international retailers, mostly mid to high-end luxury brands, are also contributing to the spike in customer traffic in the country’s central business district.

An emerging economy
Leechiu’s presentation also mentioned that business channel CNBC ranked the Philippines in the top spot of its roster of countries for long-term economic growth prospects because of rapid population growth, beating India and China.

Citing consistent economic performance, population growth and high birth rates, Goldman Sachs included the Philippines in its N-11 list of countries expected to emerge as economic powers in the near future.

The list includes Mexico, Indonesia, South Korea, Turkey, Iran, Bangladesh, Egypt, Nigeria, Pakistan and Vietnam.

In 2011, amid the US economic slowdown, eurozone crisis and massive investment outflow, the N-11 had beaten 93 percent of US-based emerging market equity funds while BRICS, another group of developing economies comprising Brazil, Russia, India, China and South Africa, lagged by almost 89 percent. For the first half of the year, N-11’s equity funds rose by almost 12 percent compared with the 3.2 percent increase of BRICS.
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