The country’s property sector will be able to grow in the next two to three years as the Duterte administration’s infrastructure spending boosts the economy, property consultancy firm Colliers International said Thursday.
“With economic growth for the remainder of President Duterte’s term (June 30, 2022) likely to be anchored on government and infrastructure spending, Colliers sees a sustained property market over the next 12 to 36 months,” it said in a report.
The property consultancy firm noted that the Philippines’ gross domestic product grew by 6.2% in the third quarter of 2019, one of the fastest growing economies in Asia ahead of China’s 6% and next to Vietnam’s 7.3%.
The improvement was mainly fiscal-spending driven, with public construction rising by 11% in third quarter from a 27% contraction in second quarter.
Private construction also rose by 19.1%, sustaining the 10.4% growth posted in the third quarter of 2018.
“This indicates a strong appetite for office towers, residential units (condominium and house & lots), malls, hotels, and industrial parks across the country,” Colliers said.
“Over the next two years, Colliers sees the economic growth being sustained by an improved credit rating, decelerating inflation, and a higher ranking in global competitiveness surveys,” it said.
The property consultancy firm listed the following recommendations for landlords and tenants to further explore opportunities in the property market:
Identify expansion sites and alternatives for outsourcing and offshore gaming firms
Develop co-living and mid-income projects
Housing flexible workspace operators
“Colliers encourages landlords to help outsourcing tenants identify viable alternative sites outside Manila particularly with the national government’s push to expand outsourcing operations in second and third tier cities,” it said.
“POGO (Philippine Offshore Gaming Operator) firms have also started to occupy space outside Metro Manila and landlords should offer opportunities in cities that accommodate POGO operations,” it added.
The construction and rehabilitation of railway and expressways across Metro Manila has resulted in unbearable traffic jams across the capital’s major roads, Colliers said.
“This has compelled developers to build co-living projects near key business districts which primarily cater to young professionals who want to live near their places of work but cannot afford to buy or lease out condominium units within the major CBDs (Central Business Districts),” it said.
“Colliers believes that these types of housing are likely to remain popular among Metro Manila employees especially as major infrastructure projects, intended to ease Metro Manila traffic, will likely continue through at least 2025,” it added.
The take up of mid-income condominium units amounting to P3.2 million to P6 million or $61,500 to $115,400 per unit remains strong, accounting for the bulk or 43% of aggregate take-up in Metro Manila in the first nine months of 2019, Colliers noted. —Ted Cordero/VDS, GMA News