PHILIPPINE REAL ESTATE and RELATED NEWS in and around the country . . .
.
.

More property growth seen

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         
___________________________________________________________

real estate central philippines
Copyright ©2008-2017