Conclusion
THERE is growing consensus that “the Philippines is [now] becoming less Metro Manila-centric and real-estate developments have started to move outside the capital.”
Cebu and lloilo in the south and Pampanga in the north seem to have been chosen by Megaworld, Ayala Land and Century Properties to be the sites of the country’s next-wave cities and critical catalysts of economic growth. There is no doubt that each of these new projects will be excellently master-planned. Our only reservation is whether these project master plans will be harmonious with the Comprehensive Land Use Plan (CLUP) and Comprehensive Development Plan (CDP) of the host cities or provinces or regions where the new projects are being put up. Hopefully, there are honest-to-goodness CLUPs and CDPs that will serve as framework for the emerging urban development projects.
Worth mentioning are the developments taking place in Tagaytay City, about an hour’s drive from Makati.
Records show that total inventory of projects in Tagaytay for a period of three years amounted to P28.59 billion. Condominium projects appear to be the leading development (80 percent of inventory), as dictated by market demand, in 2013, after three years, only P10.972 billion of inventory remained. In other words, sales have been brisk at, about P829 million by month, or P6.8 billion a year. Market observers say that the prospects for 2014 and 2015 will be even better.
Finally, there is the newly-discovered goldmine of tourism and hospitality that has attracted humongous-and instant investments into the country. The Entertainment City complex in Paranaque City of the Philippine Amusement and Gaming Corp. (Pagcor) saw the opening of its second integrated resort this year—the City of Dreams.
This follows the Solaire Resorts & Casino of Bloomberry Resorts Corp., which opened in 2013 and will be followed by the opening of the Okada Group’s Manila Bay Resorts. The Resorts World group has broken ground on its second property in the complex and the plan is to complete it by the fourth quarter of 2018. The Pagcor is looking at $7 billion in gaming revenue by 2019.
Government efforts to improve public infrastructure, maintain political stability, control inflation and keep interest rates low are critical factors that help improve and sustain the property market.
But in the current Philippine situation, it is clearly the private sector that is leading the effort and its clearest manifestation is the push for the development of new townships and the continuous transformation of cities into business landscapes, where pocket developments are planned and built for self-contained communities in accordance with the live-work-study-play paradigm.
By now, there is no doubt that Filipinos have accepted the new community paradigm as the basis of a new lifestyle and standard of living worth the investment of their hard-earned money. Thus, thousands upon thousands of overseas Filipino workers and business process outsourcing (BPO) workers are buying into communities where residences, office buildings and facilities, retail outlets and even schools are designed side by side and in harmony with each other to facilitate access by the residents and workers to these basic necessities.
In addition, we also see the phenomenon of more and more foreigners buying into these communities. Some of these foreign buyers are expatriates in the employ of outsourcing and offshoring (O&O) companies that favor the Philippines as the location for their business. Others are citizens from the countries of the Asean who actively participate in the economic integration program and come to the Philippines to work, study, play, or simply live.
It is generally conceded that investors from the O&O and BPO industries will continue to bank on the country’s cost efficiency and skilled labor force. Proof of this is that vacancy rates among central business districts (CBDs) have been dropping on a quarterly basis in the major growth centers of Metro Manila, like Makati, Bonifacio Global City, Ortigas, Alabang and Pasay City. The only recent exception has been Quezon City.
New townships are pre-selling strongly. These projects can be seen across CBDs—Bayshore in Pasay; City Gate in Makati; Uptown Bonifacio; McKinley West and Area South in Taguig; Woodsite City and Capitol Commons in Pasig; and, Vertis North in Quezon City.
Such upbeat economic trends are a consistent boost to the high-end to mid-market demand for luxury, high-end, affordable and mid-market condominiums. It is the demand for these developments that have essentially overpowered the fears of a property bubble in the residential sector.
Noteworthy is the recent invigoration of the manufacturing and automotive industries with the inflow of investments from Germany, Japan and Korea. Not too long ago, manufacturing hardly contributed to GDP growth. There are signs of a possible reversal to its pre-eminent position. The different incentives offered by the Philippine Economic Zone Authority, helped along by the robust macroeconomic indicators, competitive labor resources and a stable political climate, are encouraging more locators to set up shop in the Philippines.
Developers, such as Vista Land, Ayala Land, Megaworld and Century Properties have been quick to see the possibilities of a more vigorous industrial sector and are now keen on putting up developments in areas outside Metro Manila where these industries are locating.
The foregoing observations are proof positive the real property market in the Philippines is vigorous and competitive. With greater improvement in our overall infrastructure development, basic urban services, more efficient and dependable mass transport systems and more transparent and accountable governance, the property market will thrive and grow even more in the foreseeable future.
Without any doubt, the Philippines will continue to be one of the brightest spots in the Asian regional property market. The year 2015 will contribute further to our country’s emerging role.
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Rodolfo G. Valencia is national president of the Philippine Institute of Real Estate Service Practitioners Inc. and CEO of the RGV Real Estate Group of Cos. This is an abridged version of his speech delivered at the Philippine Association of Local Treasurers & Assessors Inc.’s 82nd Annual Convention and Seminar-workshop on February 3.
1 comment
The Author of RA 9646 has shared a spectacular insight on how the private developers are greening and landscaping the PH Real Estate Industry.