The real estate sector doesn’t seem to show any signs of slowing down this year, according to property analysts.
The year 2013, for Enrique M. Soriano III, Ateneo program director for real estate, was relatively stable. “The sector weathered local and regional challenges,” said Soriano, who is also a senior adviser for Wong+Bernstein Business Advisory.
This echoes the fourth quarter 2013 report of Colliers International, which showed the Philippine economy continuing to surge ahead as the country posted a 3rd Quarter 2013 GDP (gross domestic product) growth of 7.0 percent, maintaining the year-to-date growth at 7.4 percent.
Colliers cited services and industrial sectors, particularly real estate, renting and business activities, and manufacturing comprising the bulk of the growth. Despite the recent calamities, approved foreign investments continued to pour in, owing to increased investor outlook due to prudent and effective fiscal and economic management.
Jones Lang LaSalle’s property market monitor for January 2014 quoted a corporate executive of Teleperformance Asia Pacific that the Philippine O&O (offshore and outsourced) sector is expected to lead the industry among Association of Southeast Asian nations (Asean).
Robust performance
“The robust performance of the local sector may be attributed to its cost efficiency, the English language proficiency of the workforce and the quality of services. The rising demand for nonvoice activity is also seen as one of the growth drivers for the O&O sector,” said the JLL report.
CBRE Philippines chair and founder Rick Santos noted during a recent Makati press conference: “The Philippine property sector will continue to accelerate in 2014, taking off from last year’s stellar performance.”
Santos added: “Elsewhere in Asia, markets have slowed down. However, and despite recent calamities, the country’s real estate sector is a buoyant market, and global investors are starting to recognize the country as a top investment spot in Asia Pacific. No longer is the Philippines an underestimated market. Investors now see the sweet spot that it is in all property fronts: office, residential, industrial, retail and leisure. We expect 2014 to be an unprecedented year in real estate investments for the country.”
Outside Metro Manila
Soriano said the office market will continue to grow and demand will be dispersed out of the traditional CBDs (central business districts) in favor of new CBDs.
He added that other asset classes such as retail and hotels will likely post solid growth as employment and spending in the domestic front continue. Community and strip retail developments and boutique hotels will spur growth outside Metro Manila.
This is how Soriano described developers’ competition: “Overall, its going to be a tough year and developers will have to brace themselves for more ‘street fighting’ in the residential front. Expect price and installment wars to escalate.”