The Philippine property sector is expected to grow in the next six years, as economic indicators have shown that the country has solid macroeconomic fundamentals.
“We are doing fundamentally well. The Asian Development [ADB] and the World Bank have been reminding us that we are going to continue to grow,” Leechiu Property Consultants (LPC) CEO David Leechiu said in a media briefing held on October 12 in Makati City.
In its September 2016 outlook, the ADB upgraded its growth forecast for the Philippines to 6.4 percent from 6 percent in its earlier study. Furthermore, the Philippine Statistics Authority reported in its August 2016 update that the country’s GDP grew by 7 percent during the second quarter of 2016.
Leechiu said 2018 will be a landmark year for the property sector, as majority of the projects in the major business districts are going to be completed. “There will be little land left for development,” he said.
Moving forward, Leechiu said he expects Bonifacio Global City, Bay Area, Filinvest City and Arca South as the projects to watch, because of their huge impact not only to the property sector but to the economy, as well. He added there will be dramatic changes in the next six years, especially on Ayala’s Arca South and Gotianun’s Filinvest once the infrastructure projects, such as the Cavite-Laguna Expressway, in Alabang will be completed
As far as the three major commercial business districts (CBD) are concerned, Leechiu said Makati, Ortigas and Bonifacio Global City will continue to grow with their array projects in the pipeline. In Makati City, the Makati CBD, Century City, Rockwell and Circuit Makati are currently implementing their development projects. In the Ortigas area the Ortigas CBD, Rockwell Business Center, Arcovia City, Silver City and Capital Commons are continuing to develop their respective projects.
In BGC, construction is on a high level in Bonifacio Global City, McKinley West, McKinleyHill, Uptown and Veritown.
Leechiu said the business-process outsourcing (BPO) industry is also on the growth path.
The Information Technology Business Process Association of the Philippines (Ibpap) plans to double its work force to 2.6 million, from the current 1.3 million, in the next six years. He assured the property sector can handle the office-space requirements of the sector. At present, there are 46 business parks in Metro Manila’s cities, such as Quezon City, Mandaluyong, Muntinlupa, San Juan, Taguig, Las Piñas, Pasay, Parañaque and Manila.
In response to the call of inclusive growth, more than 180 information-technology parks and business districts have been built in Laoag, Cagayan, Baguio, Tarlac, Bulacan, Urdaneta, Pampanga, Aklan, Iloilo, Bacolod and Dumaguete. Leechiu added that the information technology-business process management companies (IT-BPM) industry will continue to be a significant part of LPC’s business, as the IT-BPM sector continues to expand. It is now second only to overseas Filipino workers remittances in terms of amount contributed to the country’s GDP, with a reported $22.25 billion in revenue as of 2016.
“We are quite optimistic that 2017 will be good because of the scale of demand for office and BPO needs totaling 600,00 square meters,” Leechiu said.
Leechiu added that the company’s investment-sales arm managed the acquisition and sale of properties worth P3.5 billion within five months. The firm has also transacted 81,000 sq m of office space in the same period, and is currently marketing 25 project buildings with a total space of 705,000 sq m.
“We are very proud of what we have accomplished in our first five months. This only proves that LPC has one of the deepest benches of expertise and experience in the field of real estate. We want to maintain our mark as a bold, pioneering, homegrown company with a team of seasoned and talented professionals who are eager to do more, as we continue with more projects and transactions in the pipeline,” Leechiu pointed out
LPC’s investment-sales team is all set to transact P17.6 billion worth of deals in the next six to 12 months, to add to its portfolio of properties sold mostly in South of Manila: Makati, Alabang and Bonifacio Global City.
On its occupier solutions front, the firm looks to further strengthen its capabilities in locating for IT-BPM, as this sector is one of the main drivers of the company’s portfolio. Of the 82,000 sq m of office space it has transacted since May, 76,000 sq m are for IT-BPM companies, while the remaining 6,500 sq m are spread across industries.
“IT-BPM companies employ 1.3 million people, and the competency of the Philippines in handling IT-BPM operations continues to improve, thanks to initiatives, such as Next Wave Cities by the DOST-ICTO [Department of Science and Technology-Information and Communications Technology] and Ibpap. Thus, we expect this sector to still grow exponentially in the coming years, with LPC backing up IT-BPM companies looking for the best-suited locations for their business,” Leechiu added.
In terms of live deals for occupier solutions, LPC already has 333,000 sq m in the pipeline, 41,000 sq m are coming from the IT-BPM sector, while the rest, at 292,000 sq m meters, will come from other industries.
In addition, LPC has successfully completed the acquisition of Vertex Land Development Management Consultancy Inc. The acquisition will allow LPC to offer its clients a full suite of consulting services that includes market research, project conceptualization and project feasibility—strengthening the firm’s capabilities in transacting P17.6 billion worth of deals over the coming months.