PHILIPPINE PROPERTY MARKET REPORTS

We are pleased to announce that the 2nd quarter 2018 property market report is now available. Global real estate services company Colliers International, in a recently released report, identified key issues and opportunities in the Philippine property market particularly in the office, residential, hotel and industrial sectors.


OFFICE

Historical highs
The Metro Manila office sector remains robust with net take up for the first six months of 2018 already outpacing 2017 figures. For 2018, Colliers expects a little over a million sq m (10.7 million sq ft) of net take up, the highest in Metro Manila’s history. We see the strong demand being complemented by record-high completions. To take advantage of the sustained take up, Colliers encourages developers to execute their construction schedules strictly and consider acquiring parcels of land around the nodes of new infrastructure projects where office towers could be built. Large multinational and knowledge process outsourcing (KPO) firms with plans to consolidate should consider space within Ortigas, Fort Bonifacio, and the Bay Area as these locations will likely account for half of new space due to be completed over the next six to 18 months. Cost-sensitive government agencies and small businesses planning to transfer to new space should consider buildings in Quezon City. We encourage outsourcing firms planning to avail themselves of tax incentives to consider Philippine Economic Zone Authority (PEZA)-proclaimed space including those in Ortigas Center. Meanwhile, buildings with large floor plates are being taken up quickly by offshore gaming tenants. To bridge the supply gap, we encourage these companies to start looking at viable sites outside Manila such as Cebu, Laguna, and Pampanga.

RESIDENTIAL

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. 



HOTEL

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.


INDUSTRIAL

Sustained occupancy, amid wait-and-see attitude from occupiers
Foreign investment pledges into the Philippines for the first six months of 2018 declined due to uncertainties surrounding the implementation of the second package of Tax Reform for Acceleration and Inclusion (TRAIN 2). The measure proposes to rationalise tax and non-tax incentives granted to industrial occupiers. Despite the uncertainty, the take up of industrial space remains stable while a few existing occupiers have announced plans to expand operations within Central and Southern Luzon industrial parks. To maximise thriving opportunities in the sector, Colliers believes that developers should modernize their warehouses to adapt to the needs of modern logistics. In our opinion, developers should line up expansion plans based on the industrial roadmaps that the national government intends to implement. Colliers also recommends that developers with industrial space within their township projects in Northern and Central Luzon speed up the completion of necessary public works such as roads to capture the interest of tenants scouting for space outside the Cavite-Laguna-Batangas (CALABA) region. Lastly, given the sustained appetite for space and lack of new supply, we encourage developers to consider partnering with local governments for the conversion of land into industrial parks subject to the local governments’ land use plans and ordinances.


Learn more on what transpired during the fourth quarter by downloading the links below.

2Q 2018 Office Report

2Q 2018 Residential Report

2Q 2018 Hotel Report

2Q 2018 Industrial Report


RELATED NEWS COVERAGE

The Manila Times

Business World

The Philippine Star

Philippine Daily Inquirer

The Freeman

The Philippine Star

Manila Standard

Cebu Daily News

Business World

Philippine Daily Inquirer

The Philippine Star

Retalk Asia

Entrepreneur Philippines

The Philippine Star

Philippine Daily Inquirer

The Philippine Star

Cebu Daily News

BusinessWorld Live

Manila Standard

The Freeman

The Visayan Daily Star

Retalk Asia

TTG Asia

Business World

Philippine Daily Inquirer

Philippines
Colliers International | Manila 11F Frabelle Business Center, 111 Rada Street Legaspi Village, Makati City 1229 Philippines | Tel: +632 888 9988