This week, Colliers Research provides insights on how the newly enacted CREATE Law and legislative amendments made to the Foreign Investments Act and Public Services Act are making the Philippines attractive to foreign investors, and Federal Land’s new condo projects and why property developers should consider land-banking in fringe areas to capture pent-up demand.
Foreign companies keen on investing in PH
House Committee on Economic Affairs Chairman Rep. Sharon Garin reported that several foreign companies are interested to invest in the Philippines after the passage of the amendments to the Foreign Investments Act and Public Services Act. Rep. Garin said that the country is now attracting foreign investors who were formerly hesitant to invest due to restrictive old laws. Among the firms that will operate soon in the Philippines is Elon Musk’s Starlink. The satellite-based Internet service provider will potentially bring high-speed Internet access to rural areas. Several Swiss companies are also keen on expanding their operations in the country.
Colliers believes that the enactment of the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE), Foreign Investments Act, and Public Services Act should help ensure that the Philippines remains attractive to foreign investors. In our view, the easing of investment requirements will likely lead to greater office and industrial space absorption in the country. Colliers recommends that office and industrial park developers highlight government incentives to these potential investors. These include lower corporate income taxes and extended tax holidays under CREATE Law, and the provision of 100% foreign ownership to domestic enterprises under Foreign Investments Act. Developers should also actively monitor the profile of incoming locators as each firm has different requirements for office and industrial space.
Federal Land to launch 3 new projects
Federal Land targets to launch new residential towers in Siena Towers in Marikina, Quantum Residences in Manila, and Mi Casa in the Manila Bay Area. According to Federal Land, “these properties are good investment options for those looking for a place to live, rent out, sell, or unwind” as they are near commercial and retail establishments, schools, and health institutions. Siena Towers, located along Sumulong Highway in Marikina, is a mid-rise condominium project inspired by the setting of Siena, Italy. Meanwhile, Mi Casa is one of Federal’s residential developments in its Metropolitan Park township in Pasay. Federal Land also said that Quantum Residences is seeing “robust demand from buyers.”
Colliers recommends that developers consider land-banking in fringe areas viable for residential development. In 2021, we saw aggressive launches and take-up in fringe locations including Cubao–New Manila, Manila North, Manila South, and Alabang–Las Piñas. These submarkets accounted for 50% and 60% of total launches and take-up, respectively, in 2021. Developers should also actively scout for parcels of developable land in central business districts (CBD) in Metro Manila, such as Makati CBD, Fort Bonifacio, and the Bay Area. In our view, the return of expatriates to the country and more local employees reporting back to their offices should support the recovery in the pre-selling and secondary residential market beyond 2022.