04 September 2012
Makati City – Colliers International Philippines recently released their real estate market overview for the second quarter of 2012. In their quarterly release called the Knowledge Report, Colliers found that the real estate market was a benefactor of the country’s positive economic performance and remains bullish on the property market.
Office rental rates consistently increased as landlords experienced strong pricing power mainly due to limited office space amid strong demand from the BPO industry. Vacancy in Makati marginally declined to 3.9% and is seen to stabilize at the sub 4%-level by end-2012. These favorable levels are also due to the lack of developable land in Makati, with the Zuellig Building as the sole office project to be delivered in the third quarter. Rental growth has also been strong in the Fort Bonifacio CBD, with rates reaching highs of P750 per square meter, but this is seen to slow as new supply for the following year will be substantial.
Meanwhile for residential property, residential development in Makati and Fort Bonifacio remains strong. Julius Guevara, Associate Director and Head of Consultancy at Colliers highlighted that sales takeups for residential condos reached close to 25,000 for the first half of the year. “Given the current trend, unit sales are seen to exceed last year’s levels of around 48,000 units,” Guevara said. For the rental market, vacancy rates in Makati were stable at 11% despite the influx of smaller units. Rental growth has also been positive for the premium residential market, growing between 4 to 7%.
Colliers noted that a foreseen jump in tourist arrivals has encouraged more hotel development activity, with the hotel room stock in Metro Manila almost doubling by 2016. However, the outlook on the industrial sector is still flat, as vacancy rates in the various industrial parks in Laguna, Cavite and Batangas hovered around 11.3%. High electricity rates keep a damper on manufacturing, thereby affecting rental growth and occupancy.