AS the economy continues to ride high on the back of investment-rating upgrades and with the strong economic fundamentals in place, a property consulting firm’s top executive sees that the real-estate growth experienced in 2014 will continue this year and beyond.
“The exact rate of growth is unclear at this time, but it will undoubtedly form a significant portion of the estimated GDP [gross domestic product] growth of around 6 percent plus for 2014,” Jones Lang Lasalle COO Lindsay Orr told the BusinessMirror. “For 2015, further growth is envisaged along the lines of 2014.”
While bright prospects are ahead of the property sector, the office segment for now, though, looks particularly rosy, given the increasing demand for space from business-process outsourcing companies and other traditional-office users.
Lease rates are projected to at least maintain their current levels and, in some instances, will keep on rising owing to strong market demand.
Precommitments will continue for office space, as large-scale tenant-firms vie for the same space and become more focused in pursuing their space requirement.
“Precommitting prior to completion guarantees them the expansion space likely to be needed over the next year or two,” Orr said.
“Office expansions in decentralized and provincial locations will continue to happen, with numerous developments either currently under way or being planned by the country’s more established developers,” he added.
In the residential sector, around 145,000 condominium units are expected to be developed in Metro Manila over the next six years.
More than 58,000 units of these will be coming to the market in 2015 alone.
Housing projects from large developers, such as SM, Megaworld, Ayala Land Inc. and DMCI, will complete the majority of the future supply.
“There should be a stable investment demand due to the continuing positive outlook on the economy and the continuing healthy inflow of OFW [overseas Filipino worker] remittances,” Orr said.
“However, a possible point of caution arises due to the stricter regulations now being implemented by the BSP [Bangko Sentral ng Pilipinas] on banks’ lending ability, which could have a tempering effect on demand,” he added.
As to the retail sector, 2015 will be an exciting year for players, as more shopping areas are expected to rise, while operators of convenience stores will expand aggressively, thus intensifying market competition.
For the hotel or hospitality segment, Aseana City is seen to evolve, alongside Philippine Amusement and Gaming Corp.’s Entertainment City, as a top tourist destination within the next two to three years.
“Increasing levels of tourism are driving the demand for quality hotel rooms, with new hotel rooms in Entertainment City obviously focusing on the gaming sector,” Orr said.
But still, developers will remain confident on exploring opportunities to build more hotel rooms, and other leisure resorts are in the pipeline in places such as Palawan, Cebu and Bohol.
“Cebu will continue to play an important role in promoting Philippine tourism due to its amenities and accessibility. New areas in Cebu are likely to be identified for resort/leisure development, such as the Cordova Reef,” he added.
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This is definitely a welcome news specifically for us who are affiliated with the Real Estate Business in the Philippines ( FloorSpace.PH ). With the demand for more residential, commercial and retail infrastructures, we can foresee that the Philippine economy is will undeniably thrive this 2015.