Demand sustains pace
The benefits of warmer relations between the Philippines and China are spilling over to the residential sector. Developers have been benefitting from increasing residential demand from Chinese employees and investors while we see greater potential for partnership between Filipino and foreign developers as Colliers International Philippines has observed more enquiries from firms based in Japan, Hong Kong, and Mainland China. Leasing of condominiums in the secondary market remains strong resulting in lower vacancy and arresting the decline in rents. We believe that developers should be on the lookout for possible partnership with foreign developers and build more upscale condominium projects in the Bay Area where demand for high-end properties is rising. Developers should look at housing opportunities in Cebu, Pampanga, and Laguna as offshore gaming firms have started to operate in these locations.
New terminal spurs leisure
The Philippine leisure sector gets a much-needed boost following the completion of the second terminal of Mactan-Cebu International Airport (MCIA). With the Department of Tourism (DOT) projecting a surge in foreign arrivals, local and national developers in Cebu have started either to bring in foreign hotel brands or to expand homegrown ones.
Colliers is seeing a similar trend in Metro Manila with developers cashing in on the rising number of international visitors by building three to five-star accommodation.
We believe that hotel developers and operators should start targeting travellers by pursuing a yield maximisation strategy that factors in the average daily expenditure (ADE) and average length of stay (ALS) of tourists; offering amenities that appeal to both millennial and business travellers such as flexible workspaces, pop-up retail shops and libraries; building hostels in the fringes that offer a mix of dormitories and junior suites; implementing mobile payment options in hotel lobby retail outlets; improving online access to loyalty programmes; and maximising partnerships between the Tourism department and airlines.