FOREIGN investors continue to bet on the different real-estate sectors in the Philippines, especially in gaming, on the back of strong macroeconomic fundamentals and improved buying power of the market.
On the fourth quarter of 2014, the country’s gross domestic product (GDP) increased by 6.9 percent and the annualized growth rate is 6.1 percent, thus retaining its position as the second-fastest-growing economy in Asia next to China.
Such strong economic performance earned confidence from investors to come in, which led to a P6.20-billion cumulative foreign direct investment for 2014, according to the Bangko Sentral.
The optimism of investors will continue on GDP prospects at 7 percent by end of 2015 and 8 percent for 2016, as forecast by the National Economic and Development Authority.
With favorable inflows to spread across all industries, real estate is seen to flourish further, particularly in the gaming segment, which is now considered as the “sunshine market,” given the commencement of operations of various licensed casinos and others coming online in the near future.
Driving its growth is the Entertainment City of the Philippine Amusement and Gaming Corp. (Pagcor) in Pasay City, the report by Fitch Ratings, dubbed “Eye in the Sky Series: Philippines,” revealed.
In 2013 Solaire Resort and Casino of Bloomberry Resorts Corp. first opened in this gaming complex.
Two years after, the City of Dreams Manila—a joint venture between the SM Group and Lawrence Ho of Macau’s Melco Crown Entertainment—recently opened the 940-room hotel, with 380 gaming tables, 1,700 slot machines and 1,700 electronic table games.
It has three towers to cater to these brands: Nobu Hotel, Crown Towers and Hyatt Hotel.
On its opening day, City of Dreams drew 60,000 visitors. At present, it attracts 15,000 guests on a daily basis.
Looking forward, Japanese billionaire Kazuo Okada and the joint venture of Philippine billionaire Andrew L. Tan and Genting Hong Kong Ltd. are expected to open their casino resorts here, beginning next year until 2018.
With these developments, CBRE expects strong revenues this year via other licensed players, including Travellers International Hotel Group, Bloomberry Resorts Corp., Melco Crown (Philippines) Resorts Corp. and Tiger Resorts.
Meanwhile, industry analysts project double-digit revenues for all of the licensed casino operators in the coming years.
“We are bullish on the growth of the real estate—gaming sector, especially— when private and public entities focus on developments and implementations that will favor investors,” said Rick Santos, chairman, founder and CEO of CBRE Philippines.
“If the performance of the sector continues on an uptrend, the Philippines can even rival Macau,” he added.
Similarly, the new gaming players will help boost tourism in the country from frequently visiting neighboring cities like Macau, whose casino operators are now experiencing a challenge business-wise.
Pinnacle Real Estate Consulting Services Inc. reported in its recent “Market Insight” study that Macau has lost steam and realized a revenue drop in 2014 after a decade of expansion.
“Some industry players are attributing this to the Chinese government’s high-profile anticorruption drive that spooked the high rollers, which account for bulk of the gaming revenues of Macau,” it said.
Considering that foreign investors are setting their sights on the Philippines, the real-estate industry should maximize its resources by building entertainment centers with the integration of commercial, leisure and gaming spaces.
CBRE suggested developers to do a holistic approach, taking into consideration the strength of the country as a top tourist destination.
Data from the Department of Tourism showed that visitor arrivals reached 456,524 in February of this year, up 8.02 percent from 422,631 tourist arrivals in the same period last year.
“Tourism does play a hand in the development of the gaming sector as the Philippines goes beyond the casinos; tapping into other hospitality aspects, such as MICE [meetings, incentives, conferences, exhibits] and entertainment,” Santos said.
Think tanks are bullish on bright prospects ahead of the gaming sector with the projected influx of gamers and high rollers from neighboring countries.
They agree that simultaneous development of the gaming and tourism business in the country will bring the real-estate industry to greater heights, with demand and supply going up.