To avoid traffic hell, employees live like students in cramped spaces
The worsening traffic gridlock in Metro Manila has opened up opportunities for property developers to build residential property for lease, mostly co-living or dormitory facilities close to central business districts, property consulting firm Colliers said.
Based on a survey conducted by Colliers, a typical dormer was willing to pay P4,000 to P6,000 for a coliving space, versus the cost of monthly commute of more than P4,500 and a daily commute of one to three hours one-way.
“It’s just a bit tricky because between residential for sale and a coliving, of course the returns will be higher if it’s something for sale because it’s a quick sale,” Colliers International Philippines managing director Richard Raymundo said in an interview.
Assets with recurring revenues like dorm facilities will typically give a return of 10-15 percent per annum as opposed to outright sales that could yield 20-percent annually, Raymundo estimated.
“But developers need to start balancing portfolio. You have to have some products like these that will give back to people who are working in mixed-use developments,” he said.
In a research note, Colliers research manager Joey Roi Bondoc said the construction and rehabilitation of railway and expressways across Metro Manila had resulted in unbearable traffic jams across the capital’s major roads, compelling developers to build co-living projects near key business districts that primarily would cater to young professionals.
Colliers believed these types of housing were likely to remain popular among employees.
Colliers estimates there are 7,290 beds in coliving facilities now versus around 34,935 people who are willing to stay in these alternative residential facilities.
This indicates there is a steady stream of demand from local employees, either living in shared units or pooling funds to lease out studio or one-bedroom units near the CBDs.
Ayala Land’s Flats Amorsolo in Makati, for instance, charges P6,250 per person monthly for four occupants of loft rooms and P5,500 per person monthly for four occupants in bunk rooms.
SM’s MyTown Sydney charges P16,500 monthly for a private room and P4,150 to P8,600 monthly per person for shared rooms.
Aboitiz Land has also entered the residential apartment-for rent business by buying 50 percent of micro-studio apartment developer Point Blue, which designs, develops and manages apartment units that range from 10-15 square meters in size, and are rented out for P12,000 to P15,000 monthly all-in.
Apart from coliving facilities for young professionals, Colliers believed developers should also invest in student-centric homes.
“College students in Metro Manila are not spared from the worsening traffic … We encourage developers to continue tapping this market and further explore developable areas near university areas in Manila, Pasay, and Quezon City,” Bondoc said.
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