It would seem that the local real estate industry is still picking up, and you can see developers putting up all sorts of projects, addressing the needs of just about every single market imaginable. Article by Rizal Raoul Reyes for Business Mirror.
With a remarkable economic growth rate of 6.1 percent, vigorous service and surging foreign investments, the country’s property sector is slated to have another growth year in 2015, according to real-estate services agency KMC MAG Group.
“We expect the property markets to remain active throughout the year,” shared KMC MAG Group Managing Director Michael McCullough in a recent media briefing held in Makati City. “There are a lot of reasons for this optimism, chief among them low interest rates, quantitative easing from the central bank and positive feedback from investors. These factors have helped create a favorable climate for both local and foreign businesses.”
McCullough noted that the emergence of townships across various cities resulted in the creation of pockets of growth and development in Metro Manila. He said property titans, such as Andrew Tan-led Megaworld, the Sy clan’s SM, and the Zobel-headed Ayala, are focusing on township projects, with Megaworld turning its attention to McKinley West and Uptown Bonifacio, while SM is working on reclaiming more land and expanding the Mall of Asia complex, and Ayala developing the Arca South (Taguig), Makati Circuit (Makati) and Vertis North (Quezon City) townships. Moreover, developer Vista Land of former Sen. Manuel Villar has also started to build townships.
The completion to develop townships led to the pouring of gargantuan amounts expected to breach the P300-billion mark this year, covering land acquisitions, ongoing projects and launches.
“The township concept also provides a way for developers to be part of the solution to the congestion in Metro Manila,” McCullough said. “With developers taking the critical first step and building in other areas within and outside of the Metro—they’re creating new microdistricts and encouraging more Filipinos to live, work and play closer to home. We hope that this will help reduce congestion and make Metro Manila more livable.”
The outsourcing industry will continue to boost the demand for the office market, which has encouraged developers to launch new developments across Metro Manila. In 2015 alone, he said, approximately 560,000 square meters (sq m) of new office space are expected to be built across the major central business districts, with nearly half of the supply located in BGC.
“The expansion of business-process outsourcing [BPO] to new wave cities and the economic growth in major cities, such as Cebu and Davao, have spurred developers into pursuing more projects outside of Metro Manila,” McCullough said.
He said the office supply is also set to increase in Alabang, Ortigas and in the bay area, with the additions of the Alabang Town Center BPO Building, Vector Three, the BDO Corporate Center and Five E-com. Meanwhile, Quezon City will have to wait until 2016 for new office supply.
The retail sector also enjoys the advantage of having lower rates than Hong Kong, Singapore, Australia, Japan, Malaysia, Indonesia and Vietnam. “At $49.1 per sq m, the monthly prime mall-rental rate in Manila remains as the lowest in the region, less than its counterparts Ho Chi Minh City, Hanoi, Jakarta and Kuala Lumpur. The Philippines should be taking advantage of that,” McCullough noted.
On the other hand, McCullough recommended the strengthening infrastructure and relaxing foreign-ownership rules to attract more investments and fully maximize its positive momentum. “We need to make it easier for potential investors to come in and see what we have to offer.”
“If the Philippines invests in connectivity throughout Luzon, the Visayas and Mindanao, and supports this with good governance, sound macroeconomic policies and more liberal foreign-ownership rules, then it stands a good chance of becoming an economic powerhouse in Southeast Asia.”
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