Metro Manila’s residential condominium stock has grown steadily over the past several decades.
From merely complementing office space construction in the Makati central business district to providing alternative condominium options around the business hubs’ peripheries, condominium completion in the country’s capital region has come a long way, redefining the quality of living of local and foreign end-users.
Sustained acceptance
Owing to a sustained acceptance for condominium living across Metro Manila, condominium development has been relentless.
This has even sprawled over to the fringes, with new condominium units in Quezon City, downtown Manila, Makati and Ortigas fringes, Parañaque, and Las Piñas complementing the vertical projects in major business districts in Makati, Ortigas Center, Fort Bonifacio, and the Bay Area.
Colliers Philippines data showed that as of end 2019, there was an estimated 130,000 condominium units across key business hubs in Metro Manila.
Fort Bonifacio continues to dominate with more than 37,000 units. Makati CBD accounted for 22 percent or about 28,200 units, but it is likely to be overtaken by the Bay Area this year as we project the reclaimed business district’s condominium stock to reach 34,000 units by end-2020.
By 2022, Colliers Philippines estimates that Metro Manila’s condominium stock will reach 158,000 units, up 22 percent from 2019.
Chipping in to the additional supply are the first-movers and major players in the Metro Manila condominium market which include Ayala Land, Megaworld, Filinvest Land, Federal Land, Rockwell Land, Robinsons Land, Araneta Group, and SM Development Corp. (SMDC), among others.
Masterplanning
Condominium development in the capital region started with the private sector-led masterplanning in Makati CBD.
Here, a former runway was then redeveloped and repurposed as Metro Manila’s new business district. Based on Colliers Philippines data, the first office tower was established in the early 1960s followed by the first condominium project which was completed in 1970. From only 12 units completed in 1970, the business hub’s condominium stock breached the 3,300-unit mark by the end of the decade.
Office construction around the area followed the pace of condominium development, with leasable office space expanding from 37,000 sqm in 1962 to more than 265,000 sqm as of the end of 1969.
The rise of Ortigas Center as an alternative condominium hub started in the 1980s. The presence of the Asian Development Bank as well as the establishment of office towers in the 1970s provided an impetus for the development of more vertical residential projects. The presence of multinational corporations and Filipino firms further propelled the demand for condominium projects.
Alternative enclaves, hubs
The 1990s saw the rise of an alternative residential enclave in Makati CBD—the Rockwell Center. Rockwell Land was established to develop the 15.5-ha area occupied by a decommissioned thermal power facility. The property was transformed into one of the most premium locations for residential development in Metro Manila.
The Rockwell Center served as a prototype for developers that had planned to build their own masterplanned communities outside the major business districts. During the decade, Fort Bonifacio also became an alternative to Makati CBD and this paved the way for the development of residential towers in the area. This decade also saw the completion of new luxury and expansive condominium projects within Makati CBD.
The new millennium saw the proliferation of business process outsourcing (BPO) firms in Metro Manila, which compelled developers to build condominium projects that will complement their office towers within integrated communities.
Hence, we saw the completion of new condominium buildings in Eastwood, Quezon City, and Alabang in Muntinlupa City. The live-work-play lifestyle that drove developments during the said period still resonate with many property investors today.
Integrated communities
Starting 2010s we saw the rise of new integrated communities in alternative locations in Metro Manila, with office and condominium completions starting to shift from the major CBDs to fringes—from north to south of the capital region.
It was also during the early 2010s when residential developments in the Bay Area spiked, and this was highlighted by the entry of offshore gaming firms in the fourth quarter of 2016, which further accelerated condominium completion on this reclaimed business hub.
Demand drivers
Colliers Philippines believes that condominium demand should remain strong as Metro Manila continues to have one of the most attractive rental yields in the region; relatively low prices; and sustained demand from affluent Filipinos as well as local and foreign investors.
More affluent locals are seeing luxury condominium projects as a viable investment option aside from the stock market. The shift in lifestyle further encourages high-end investors and end-users from posh villages to embrace condominium living.
Premium condominium projects continue to entice both end-users and investors due to their proximity to the bustling business hubs of Makati, Ortigas Center, Rockwell, and Fort Bonifacio. The demand has spilled over to alternative business locations in the metro.
Aside from providing tight, round-the-clock security, these properties also offer well-equipped gyms, resort-like pools, ample parking spaces, and quality interiors, among others. Most high-end projects, for instance, are near major shopping hubs in the metro. These retail establishments currently house a mix of thriving local and global retail brands that mainly cater to the residents’ discerning preferences.
Attractive investment option
Colliers Philippines did a graph showing Philippine economic growth criss-crossing condominium price growth in Metro Manila. It showed a steady increase in condominium prices despite the boom-bust economic growth cycle starting in the late 1990s. This explained why condominiums remain an attractive investment option in the country.
Over the near to medium term, we are likely to see the rise of more ultra-luxury condominium projects; the launch of larger, three-bedroom units; greater acceptance of condominium living from singles to early-nesters; and the incorporation of innovative amenities and high-quality design.
These are interesting times for the condominium market.
The author is the research head of Colliers International Philippines. Send feedback to joey.bondoc@colliers.com