Moderate growth expected in second half of 2013

Two weeks ago, property analysts issued their optimistic assessment of the first half of 2013, and used this as their springboard to predict further growth for the second half of the year.

Karlo Pobre, Colliers International’s research and advisory services manager, told Inquirer Property that “demand was particularly strong across all sectors, particularly on the commercial and high-rise residential segments at least during the first few months of the year.”

Pobre said “the BPO (business process outsourcing) industry remains the major growth driver for office space wherein the vacancy rate has been sustained at an all-time low range of three to four percent across Metro Manila.”

He added: “However, due to a substantial supply that will be introduced toward the remainder of the year, we might see some slight increase in vacancy, but it will consequently taper off as expansion plans among BPO firms materialize. Meanwhile, rental rates for Premium and Grade A offices are expected to grow by 8 to 11 percent by the end of the year.”

Claro dG. Cordero Jr., Jones Lang LaSalle head for research, consulting and valuation, revealed the following:

• Within 2013, “we are also expecting new supply to be completed: there will be more than 330,000 square meters of office space, 10,600 residential condominium units and about 500,000 sq m of retail spaces in malls around Metro Manila.”

• Despite the “historical high annual completion, we still expect the property market indicators (prices and rents) to exhibit moderate growth, at the back of improving economy and investor confidence.”

• Over the remainder of 2013, “we expect the demand sources for office, residential and retail subsectors to significantly benefit from the continued growth of the economy, given the recent investment/credit rating upgrades by S&P and Fitch Ratings. We expect the level of investments in the market to significantly improve due to this renewed confidence in the market.”

Enrique M. Soriano III, Ateneo program director for real estate and senior adviser for Wong+Bernstein Business Advisory, said: “Personally, I see a lot of exciting projects in the pipeline this year and in 2014. Funds are available and cheap, so expectedly top-tier developers have doubled their inventories, created new brands to cater to different segments, pursued aggressive expansion in growth corridors outside the National Capital Region, and have conducted weekly international roadshows. Players will naturally seize this opportunity, and the common jargon in any board room is ‘exponential’ growth.”

Two weeks ago, Soriano told Inquirer Property that “with 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 elections, 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 that “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.”