PH property market to remain buoyant

Firm sees sustained rise in values, rental rates

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The local property market remains buoyant on the back of “momentous” economic growth and confidence arising from the Philippines’ new investment grade rating, resulting in a sustained increase in property values and rental rates in key central business districts of Metro Manila.

This was based on the first quarter 2013 report issued by property consultants Colliers International that was released Tuesday, which said that the government’s newly minted investment grade status would result in greater activity in the property market for years to come.

“The market is still staying strong in all sectors but due to future deliveries, there’s pressure on the office and residential market,” Colliers International Philippines associate director Julius Guevara said in a briefing.

He said the recent move of the Bangko Sentral ng Pilipinas aimed at preventing asset price bubbles was a very prudent move. “It’s in anticipation of the bubble, which so far we haven’t seen,” he said, reaffirming that the local property market was under no threat of a bubble.

For the office sector, Colliers reported that office rental rates continued to rise in the first quarter as supply remained “muted.”

For the Makati central business district (CBD), monthly premium office rental rates rose 5.1 percent quarter-on-quarter to a range of P860 to P1,100 a square meter. This was seen rising by 7.1 percent to P880-P1,220/sq m over the next 12 months.

Rental rates for Grade A Makati CBD office space rose 0.3 percent quarter-on-quarter to P575-P900/sq m a month in the first quarter, based on Colliers data. Monthly rental rates for Makati’s Grade B offices also increased by 0.9 percent to P450-P565/sq m. For the next 12 months, Grade A and B rental rates were forecast to rise by 6.7 percent and 6.3 percent, respectively.

As with rental rates, capital values for office property have likewise expanded quarter-on-quarter as follows: 4.3 percent for premium office (to P120,000-P131,600/sq m), 0.2 percent (to P71,725-98,890/sq m)  for Grade A and 0.7 percent (P49,500-P67,300/sq m) for Grade B.

One factor that has kept office rental space firm was that some developers have held back the completion of new projects in anticipation of excess stock, Guevara said. However, he said developers were “very quick” to harness opportunities.

Office vacancy rate in Makati CBD for all grades in the first quarter stood at 3.38 percent, slightly down from 3.48 percent a quarter ago.

For the residential sector, Colliers said premium three-bedroom rental rates in Makati CDB grew by 2.3 percent quarter-on-quarter to P737/sq m a month. Premium rates for both Makati and BGC were said to be at parity and expected to improve by 8-9 percent over the next 12 months. In Rockwell, where supply is limited, premium rental rates grew by 2 percent quarter-on-quarter and have started to exceed the P800/sq m level. Annual rent is projected to rise by 9 percent.

Residential vacancy rates in Makati CBD eased to 9.8 percent in the first quarter from 10 percent a quarter ago but were projected to revert to 11 percent as new supply come in.

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  • Phunky_Juan

    Question: What’s the point of creating more condos if there are no people willing to purchase units.. I am living in a condo.. Most of the tenants are Filipinos.

  • Ian Mariano

    The problem with this article is it tells half of the story, a half truth. And it is reported (“press-released” –perhaps a better word) by a private company who’s food on the table depends on how much real estate they lease.

    I wrote an open letter to Pres. Aquino III to gently argue — on a reasonable and based on facts — on the possible problems the Philippine housing bubble burst can affect the normal Filipino citizen.

    http://renohomeblog.com/2012/12/an-open-letter-to-philippine-p.php

  • upupperclassman

    Do not take the reports of these foreign realtors seriously. Their reports are designed to boost their business. When the bubble will burst, these foreign realtors have nothing to lose, they simply move out and go to other countries.

  • Descarte5E

    Ok let’s have that trickle down effect. Mr. President, please tell all those Development Construction Corporations to pay 20% more to the “piyons”, masons, site engineers and even utility and cleaners in the buildings para naman hindi lang kwek-kwek ang kanilang hapunan. But the problem is, you Mr. President has been pronouncing that properties are continuously booming and yet they continue to pay the workers below the minimum wage.

  • http://www.facebook.com/people/Reymedina-Fong/100001830895982 Reymedina Fong

    what a joke………….. took pic of those high rise bldg……….. most empy at nite……………. no occupants…………. big lie doris

    • http://www.facebook.com/people/Reymedina-Fong/100001830895982 Reymedina Fong

      like usa this property market with no sound strong financial backing will collapse. it happened all over………. pinas no exception

      • marienkind

        What happened in the US wont happen in the Philippines because unlike the US, we’re not as big fans of private mortgage. What’s going to happen instead is more like the Thai bubble in the late 90s or more recently, the late 2000’s Chinese property sector. Even then, it won’t be as bad.

    • http://www.facebook.com/people/Al-Tan/683824631 Al Tan

      of course theyre empty, theyre office towers. Workers go home after work

      • upupperclassman

        If these tall office buildings are for BPO, they should be well lighted at night but they are not. The residential condos are mostly without lights too. Maybe the occupants never go home.

  • marienkind

    Near double digit vacancy rates at the heart of Makati CBD, supposedly the hottest property zone, is a tell-tale sign that the market’s about to overheat in a few more years. They should have included data for BGC as well since the vacancy rates there are even more ridiculous. Nobody’s just saying anything since it might trigger a panic.

    • http://www.facebook.com/people/Reymedina-Fong/100001830895982 Reymedina Fong

      those condos are empty at nite………………….. 80 pct of them.

      • Platypus09

        OFWs are paying or buying them as investments, though they look empty.

      • marienkind

        I honestly hope that you’re not judging by how many lights you see switched on.

      • upupperclassman

        Do you expect the occupants to have night vision?

      • Descarte5E

        The condos are occupied by mainland Chinese . They are home during day time. At night, they are at the piers doing their smuggling business. Some are somewhere else cooking Sssss.

      • upupperclassman

        Hahaha! These mainland Chinese can buy up to 40% only.

  • CmdrAdobo

    it means, ordinaryong filipino hindi makabili.

    • Platypus09

      We need those expensive buildings to generate taxes for our government from rich foreigners and rich local Filipinos.

      We can move to cheaper places like the provinces or rural areas where life seems meaningful, simple, with fresh surroundings, happy, and quieter.

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