Robust PHL property sector seen despite Asia slowdown – CBRE Philippines

Philippine property development will continue to expand this year despite an expected slowdown in most of Asia, real estate services company CBRE Philippines said Thursday.

 

“The Philippine sector will continue to accelerate in 2014… elsewhere in Asia, markets have slowed down,” said Rick Santos, CBRE Philippines chairman, told reporters at a briefing.

 

“No longer is the Philippines an underestimated market, investors now see the sweet spot that is in all property fronts,” he added. 

 

The manufacturing sub-sector will get a boost from Japanese and Korean companies turning to the Philippines due to political risks in the region, while the outsourcing industry will continue to fuel the office segment and ripple down to the retail and residential developers. 

 

Other than attracting investments in the industrial sector, Santos said the office segment will continue to benefit from the rosy outsourcing sector. 

 

Metro Manila alone will add 531,000 square meters in office space, with the majority coming from Quezon City, CBRE Philippines vice chairman Joey Radovan said at the same briefing. 

 

Despite the additional supply of office space, occupancy will remain at record highs as the outsourcing sector continues to eat up space, he noted.    

 

Last year, the Makati central business district registered an occupancy rate of 97.99 percent, while Fort Bonifacio recorded 97.18 percent. 

 

In Ortigas, the occupancy rate was 98.22 percent, while Quezon City logged 98.88 percent 

and Alabang with 99.84 percent.

 

Santos noted a marked increase in the banking and financial services sectors as American and European institutions relocate back office operations to the Philippines. 

 

The depreciating peso and a huge English-speaking labor force add up to the Philippines winning formula, he added. 

 

The upcoming leasable retail area will be at 242,000 square meters this year, CBRE estimates. 

 

“The country’s outsourcing industry will still be one of the best in Asia and as more occupiers relocate to the country, we see expansionary growth in Metro Manila’s fringes and provinces,” Santos said. 

 

The outsourcing sector will continue to expand in 2014, as American and European banks relocate  back office operations in the Philippines. 

 

Santos explained that restrictions in real estate investments in China, Singapore, Hong Kong and Malaysia will also result in funds flowing into the Philippines’ high-end residential sector. 

 

“We expect 2014 to be an unprecedented year in real estate investments for the country,” he said. – VS, GMA News