Philippine Property poses for more growth

What went up, and what went down in the property sector? Inquirer Property sums up the first five months of 2015 of the Philippine property sector:

1 Continuous growth amid Asean integration. The country’s property sector showed continuous growth in the first five months, mainly due to a favorable business climate, low inflation, robust performance of the business process outsourcing (BPO) sector, and continuous remittances from overseas Filipinos which have boosted the residential, retail, office, industrial and hospitality sectors. The supply and demand of these segments remained positive, especially with the upcoming Asean (Association of Southeast Asian Nations) integration,” said CB Richard Ellis (CBRE) Philippines.
2 BPO fuels residential, office segments. Enrique M. Soriano III, Ateneo program director for real estate and senior adviser for Wong+Bernstein Business Advisory, said that “from all indications, the growth was fueled in large part by the strong showing of the BPO sector.” He added that “the increasing demand has also given birth to the preselling of office spaces at the Bonifacio Global City in Taguig and accelerated the construction timelines of new offices and mixed used developments.”

Claro dG. Cordero Jr., head of research, consulting and valuation of Jones Lang LaSalle Philippines Inc., said: “The continued expansion of companies within the business process outsourcing/offshoring and outsourcing continued to drive takeup of office spaces in the first five months of 2015. Grade ‘A’ office rents have also gone up by 1 percent in the first three months of 2015. Despite the number of newly completed developments, the combined markets of luxury and high mid-end residential condominium market posted a decline in vacancy rates in the first three months of 2015. Average rental rates in shopping mall complexes also exhibited moderate increase in 1Q 2015, while vacancy rates similarly went down.”

CBRE Philippines observed that “the expansion of the BPO industry also stimulated activity in the residential sector, aside from remittances from OFWs.”

The office segment has also gone up due to BPO activities. “With the Philippines being ranked as having the second top BPO cities in the world, the strong demand from the BPO sector is spicing up the office segment,” said CBRE.

3 Healthy numbers in the retail, hospitality sectors. “The retail and hospitality sectors, on the other hand, are also mostly driven by a good flow of remittances that fuel consumer spending and the tourism sector,” said CBRE.

4 Industrial sector going global. “The expansion of foreign manufacturing firms in the country was the main driver for the industrial sector, as more international companies are moving their facilities in the Philippines,” said CBRE.

5 Upbeat market with major players showing double-digit growth. Soriano said: “The market was surprisingly upbeat in the first half of 2015 for the Philippine property sector. Despite the concerns I raised about a possible oversupply in some asset classes this year, and the waning appetite of foreign investors, the sector has defied expectations as the growth curve continues its growth momentum.”
He added, “The other upside is that most of the major players registered double-digit growth.”
Source: Inquirer.net