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Market Intelligence | Philippines November 15, 2021

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This week, Colliers Research provides insights on how government infrastructure projects, particularly those in Central Luzon, will help fuel economic growth in Pampanga and Bulacan; SMDC’s plan to launch five more residential projects before the end of 2021 and how the residential real estate market currently fares; and what will help drive the hotel sector’s recovery post-pandemic according to Megaworld Hotels and Resorts Group.

Clark airport infra nears completion
NEWS

Clark International Airport Corp. said that the PHP2.4 billion infrastructure project, consisting of an airport ramp and taxiway along the new phase of Clark International Airport, is 99.4% completed.  Meanwhile, the commercial operation of the first phase of the new Clark International Airport is scheduled to start in December 2021. This will increase the airport’s passenger capacity from 4 million to 12 million per year.

RESEARCH VIEW

Colliers believes that the completion of the new phase of Clark International Airport should decongest the Ninoy Aquino International Airport (NAIA) in Metro Manila. In the next 12 to 36 months, we see the completion of other infrastructure projects such as the NLEX–SLEX Connector, North–South Commuter Railway, and the Central Luzon Link Expressway (CLLEX) likely benefitting key provinces in Northern-Central Luzon, including Pampanga and Bulacan. Colliers sees these infrastructure projects raising demand in the property development sector. We have also observed some developers aggressively launching township projects outside Metro Manila, which feature office towers, residential condominiums, and industrial warehouses. In our view, these should result in the generation of more jobs and eventually spur economic growth outside the capital region.

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SMDC plans to unveil 5 more projects before end-2021
   

NEWS

SM Development Corp. (SMDC) is planning to launch five more projects by the end of 2021. The Sy family-led company is banking on the demand from the young workforce and the government-projected rebound in OFW remittances. Since the start of the pandemic, SMDC has launched 10 projects located in central business districts (CBD), including Makati, the Bay Area, and key locations outside of Metro Manila such as Bulacan. Some of the notable projects launched include the ICE Tower, a residential-office development in the Bay Area, and Joy Residences, a garden community with low-rise residential buildings in Bulacan.

RESEARCH VIEW

In 9M 2021, Colliers recorded 16,200 condominium units being launched in Metro Manila, up from 15,700 units launched in the same period in 2020. We believe that residential demand will likely be driven by the growth in overseas Filipino worker (OFW) remittances, which reached USD20.4 billion (PHP1.0 trillion) from January to August 2021, a 5.7% growth YOY. Colliers recommends that developers highlight the advantages of living in condominiums within CBDs. In our opinion, living within CBDs provides convenience through shorter commute time to and from workplaces and proximity to retail and health establishments.

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Megaworld hotels to bank on hybrid meetings, face-to-face conferences

NEWS

Megaworld Hotels and Resorts Group is not projecting an uptick in room bookings during the upcoming national elections, but is seeing a rise on bookings for hybrid meetings and in-person conferences. Megaworld added that the new virtual event management platform has been significant in “steering business despite the pandemic.” Megaworld believes that the faster inoculation program and the further easing of travel restrictions should help lift leisure demand across the country.

RESEARCH VIEW

In H1 2021, hotel occupancies reached 24% from 20% in H2 2020 as the government has allowed 4- and 5-star hotels to operate for leisure stays. We project vacancy to remain below 30% by the end of 2021 as we do not see an uptick in international tourists. In our view, domestic travel will stoke the leisure sector first, from which the Department of Tourism (DOT) expects the earliest recovery by 2022. Colliers recommends that hotel operators provide flexibility on their guest’s bookings such as free room upgrades and booking modifications 24 hours before arrival.

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Joey Bondoc

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Prior to joining Colliers in March 2016, Joey worked as a Research Manager for a research and consutancy firm where he handled business, political, and macroeconomic analysis. He took part in a number of consultancy projects with multilateral agencies and provided research support and policy recommendations to key government officials and top executives of MNCs in the Philippines.

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Martin Aguila

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Martin Aguila graduated in February 2019 from the De La Salle University with a degree in AB Economics. He joined Colliers Philippines in the same month and works as an analyst under the Research department. He has presented in several property market briefings with developers and investors and has assisted in the preparation of reports related to property such as Market Intelligence, GDP Flash, Quarterly Market Updates and Radar Reports. He also helps the team maintain and develop databases.

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Brent Respicio

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Brent Respicio graduated in 2017 from University of the Philippines Los Banos with the degree BS Economics. Brent is a Research Analyst for the Research Department. Prior joining Colliers, Brent already worked for a real estate firm as a researcher as well. He is involved in conducting quarterly reports on residential and industrial sector and helps in maintaining databases for the use of research and other departments. 

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