Posted on
August 06, 2013 11:21:59 PM [ Businessworld Online ]
ALL four
segments of the domestic real estate market tracked by Colliers International
are expected to continue to expand in the next three years as developers take
their cue from a fast-growing economy, according to the consultancy.
Due to a low
take-up rate at Alphaland Makati Tower, Colliers Associate Director Julius M.
Guevara said that the Makati Central Business District’s (CBD) vacancy rate
“increased substantially” to 7.8% quarter-on-quarter from 2.1%.
However,
despite the increase in leasable office properties, the demand for the premium
and grade B segments reduced the CBD’s overall vacancy rate, which settled at
sub-4.0%, Mr. Guevara added.
Businessmen
must expect a rental rate increase between 5% and 7% in the second quarter of
2014, he advised, “as take-up is estimated to build up amidst the lack of
appropriate space.”
With these
factors, “the Makati CBD strongly remains a landlords’ market,” Colliers’
report yesterday read.
Mr. Guevara
added that average capital values for premium buildings in the business
district grew by 2.3% quarter-on-quarter to P135,750 per square meter and will
reach over P144,000/m2 in the second quarter next year.
“Meanwhile,
grade A and B capital values are currently at an average of P85,735 and P60,735
per m2, respectively. Values for both grades are seen to increase between 5% to
7% in the next twelve months,” he said.
“In Asia,
Manila is at the bottom ... in terms of leasing rates. We are still quite
affordable,” Mr. Guevara said.
The supply
for the residential sector in Makati is seen to increase to 6,225 high-rise
residential units annually, generating a total of 78,000 units in 2016,
according to the report.
Both Makati
and Bonifacio Global City (BGC) will dominate supply as they collectively
represent 60% of new residential stock over the next four years.
“However, the
majority of the upcoming supply in both districts is not seen to fulfill
end-user and expatriate requirements, as only a quarter of the total inventory
is allocated to multi-bedroom units,” the report said.
“While the
leasing transactions remain strong in premium residences, lessors of the
smaller unit segments in BGC find heavy competition in attracting tenants,
resulting in weakened bargaining capacities,” Mr. Guevara added.
In the second
quarter, premium condominiums in the Makati CBD remained highly preferred. The
district experienced a quarter-on-quarter vacancy rate decline of 1.3% to 3.4%.
“On the other
hand, vacancy rates in both grades A and B slightly increased to 10.5%
quarter-on-quarter and may reach 11.1% by year-end owing to the substantial
incoming supply,” the report read.
Karlo Pobre,
Colliers International analyst for research and advisory services, said that
there are 5.22 million m2 of leasable spaces in Metro Manila.
“The 5.2
million m2 Metro Manila supply stock is as big as all the SM Malls combined,
including their malls in China,” Mr. Pobre explained. “It’s a historical high
in terms of retail supply this year.”
“The southern
district of Metro Manila has lower vacancy rates, because of traffic,” he
added. “We are expecting the vacancy growth by slightly 10%.”
Mr. Pobre
noted that while CBDs in Makati and Taguig continue to grow, Quezon City also
has potential for growth.
“There is
still more potential growth in the north section of Metro Manila -- in
Fairview, Novaliches,” Mr. Pobre said in his report.
Mr. Guevara
said in a separate telephone interview that business processing outsourcing
(BPO) companies such as call centers are flocking to Quezon City.
“There have
been a lot of BPOs because of the proximity to workers,” he said, noting that
many call center agents come from Quezon City.
Mr. Pobre
also said that the occupancy rate for both the super regions and the regions
improved by a minimal 0.5% quarter-on-quarter to 97.8%, 1.4% lower than the
first quarter of the previous year.
There will be
seven new developments this year, which translates to over 330,000 m2 of
leasable space, he added.
In terms of
hotel and leisure supply, the property consultants said that an average of
4,200 new hotel rooms are set to be produced in Metro Manila from 2014 to 2016.
This year alone, 2,260 new hotel rooms are expected before yearend.
“However,
despite the strong business environment, hotel room rates in Metro Manila grew
only at modest rate in the [first half of the year], owed to a tightened market
resulting from the increasing number of hotel developments,” the report said.
Across the
nation, over 10,000 hotel rooms are underway, set to be completed within four
or five years, according to the report.
In the first
half of the year, manufacturing economic zones registered with the Philippine
Economic Zones Authority (PEZA) increased by 0.3% to cover 55,354 hectares.
“The recent
development indicates growing requirements in the manufacturing industry backed
by a favorable investment climate,” Mr. Pobre said.
The manufacturing
industry grew by a significant 9.7% in the first quarter of the year,
facilitating the significant growth in the country’s GDP, the Colliers report
stated.
“Average land
lease hold rate increased significantly by 29% half-on-half, while lease rates
for warehouses and logistics facilities improved by 1.7%,” Mr. Pobre said.
“The positive
outlook in domestic spending will eventually improve the levels of production
driving lease rates for warehouses to grow between 4 and 5% by year-end,” he
added. -- Lorenz Christoffer S. Marasigan
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