Peaceful elections, good credit ratings raise property performanceBy Tessa R. Salazar
Philippine Daily Inquirer
The first half half of the year will be over in a month. Following a generally orderly May 13 national elections, favorable international credit ratings and property experts’ assessments have shown the property sector is flourishing.
Enrique M. Soriano III, Ateneo program director for real estate and senior adviser for Wong+Bernstein Business Advisory, said that, “with the successive Fitch and Standard & Poor’s successive credit ratings upgrade from BB+ to BBB-, PSEi hitting new peaks at 7,400, the 6- to 6.5-percent GDP 2013 forecast, renewed investor confidence due to the government’s reform agenda and the generally peaceful national and local election this week, the property sector is well on its way to outperforming last year’s banner performance, all this buoyed by a newfound optimism and rosy macro fundamentals in this 3-year-old administration despite an uncertain global economy.”
Rick Santos, CBRE chair and founder, said “the confidence in the Philippines from an investment standpoint is very high, especially in the light of the recent credit upgrades from Fitch and S&P.”
According to Santos, this has been a result of strong macro-economic fundamentals combined with an amazing confluence of events surrounding:
• Renewed confidence in the country’s leadership;
• Strong macro-economic fundamentals;
• A world-class cabinet;
• Record low interest rates;
• The outsourcing and business process outsourcing (BPO) sector creating 4.5 million square feet of new office takeup a year;
• The gaming sector taking off like Macau and Singapore;
• Record tourist arrivals;
• An influx of budget airlines;
• Remittances up, and a strengthening currency;
• Huge interest in the mining sector;
• US and Philippine relations back on track; and
• The Philippine stock market at an all-time high record level.
“The Philippine real estate market will experience sustained growth and opportunities in the office, residential, leisure and manufacturing sectors,” Santos added.
Claro dG. Cordero Jr., Jones Lang LaSalle head for research, consulting and valuation, said that “the significant sources of demand for the various property subsectors have shown significant growth trends in the first quarter of the year, primarily the level of remittances from the overseas Filipinos and the number of visitor arrivals. We can expect the property sector to register higher levels of demand due to this growth.”
Cordero said that in the first quarter of 2013, rentals and capital values in the office and residential sectors still managed to post positive growth.
Julius Guevara, Colliers International advisory services associate director and consultancy and research head, said: “The residential condominium market in Metro Manila in 2012 performed higher with sales about 5 percent more than the previous year’s levels. We are currently analyzing our market data for the 1st quarter of 2013 and it seems that the trend is continuous, so we see that for the rest of the year the preselling condo market will continue to grow at stable levels.”