GLOBAL property consulting firm Jones Lang Lasalle sees large Philippine property developers scouting for more offshore investment opportunities to diversify their portfolio even as prospects remain bright in their home market.
Christopher Fossick, JLL managing director for Singapore and Southeast Asia, said in a briefing last week that for now, the best return for local developers would be to focus on their “doorstep.”
One would question why these developers would go overseas when the opportunity in the local market was good, Fossick said.
Net office property yields—referring to yields from renting out property less the average cost of borrowing—were estimated at 3.5 percent in Metro Manila, much better than the net yield of 0.9 percent in Singapore, 1.7 percent in Kuala Lumpur and 0.3 percent in Bangkok.
“Having said that, every organization willl want some diversification, not to have all your eggs in one basket. So I think it’s just natural that what you do as investor is to look for other markets,” Fossick said. As such, the JLL executive said he was not surprised to see the likes of Ayala Land Inc., SM Prime Holdings and Gokongwei group investing overseas.
ALI has invested in real estate projects in Malaysia and mainland China and is looking at opportunities in Vietnam. SM Prime, now the leading property developer in Southeast Asia, has a growing chain of shopping malls in mainland China.