Published on Thursday, 07 March 2013 00:00 [ Malaya.com.ph ]
Written by ALBERT CASTRO
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Malaya Business News Online - Philippine Business News | Online News Philippines
The property market will continue to be strong for the next six years with more supply coming on stream in many of the industry’s segments, according to property consultant Jones Lang LaSalle.
“This year is going to be better than last year, and it will be much better next year,” said David Leechiu, Jones Lang LaSalle Philippines country manager.
For the year, prospects will be driven primarily by the business process outsourcing (BPO) and the residential sectors, according to Leechiu. The office space’s primary booster, the BPO sector will continue to grow as overseas companies looking to maximize their efficiency, Leechiu said.
Leechiu also said the residential segment is starting to be a boon for the high-end condominium market with property prices of detached homes surging in the past years.
“A P70-million (property) is the new P25 million. Valle Verde properties for example, which were going P25 million before, are now priced at P60 million to P70 million. A house in Dasmarinas (Village) or Forbes which used to cost P50 million now costs P250 million to P300 million,” said Leechiu.
The property market will likewise benefit from expansion of traditional offices.
Jones Lang LaSalle expects more foreign banks to set up shop in the Philippines.
Leechiu noted that some overseas companies that have presence in the Philippines are treating their local office as an independent “leg” in their global operations.
Leechiu said investments in mining and public-private partnership projects will have a multiplier effect on the property market.
Leechiu said the PPP projects will have a significant impact on the country.
“Because many of these projects are not Manila-based (and) are in the growth centers, the impact will be significant and over the medium term,” he said.
“When these PPP (projects) start rolling out, they would have a four- to six-year life. They would have so much scale that contractors here cannot absorb all that work,” Leechiu added.
Jones Lang LaSalle said prospects of the market are so good that its major headwinds can only be major disasters.
Leechiu said another factor that could derail the growth of the market, though it also has a positive flip side, is the ongoing fiscal crisis in Europe which may cause a double-dip recession on the US.
“If there’s a collapse in the European economy, a real collapse, that’s going to cause a double dip the US, that could really slow us down,” said Leechiu.
He said this could also have the opposite effect when investors turn to China and Southeast Asia.
“Where they come from they’re only earning 1 percent for their investments. Here, they’re getting 5, 6, 7 times that. And the amounts are small --- $20,000, $30,00. You will see more and more of that coming to the Philippines,” Leechiu also added.
Jones Lang LaSalle on Tuesday released its study showing the Metro Manila property market would be supplied by 26 emerging districts with about 1,300 hectares of developed land --- Fort Bonifacio and Makati: the 21-hectare Circuit Makati (the old Sta. Ana racetracks) of Ayala Land; the 74-hectare Arca South (formerly FTI); the 15.4-hectare Uptown Bonifacio of Megaworld; and the 10-hectareVeritown Fort by Federal Land.
The Philippine retail space segment meanwhile will benefit from the entry of international retail brands like Uniqlo, American Eagle Outfitters, IHOP, Family Mart, Grand Hyatt etc.
The residential segment meanwhile will see about 149,000 units coming on stream in the next five years (2013 to 2018), higher than the 135,650 units built between 1999 and 2012.
Of the supply in the pipeline, 55 percent would be in the affordable segment (priced at P1.5 million to P3 million); 33 percent in the P3 million to P6 million price range; 9 percent in the P6 million to P10 million price range; and 3 percent in the P10 million and above price range.