Real-estate trend report – Part I
AS 2015 comes to a close, major real-estate players remain bullish about the sector’s continued growth, as indications point to yet another promising year ahead.
In Metro Manila, for example, land values continue to rise steadily due to the heightened activity in the development of more central business districts (CBDs).
“Land values in the Makati CBD accelerated in the third quarter of 2015 by 2.43 percent to an average P463,700 per square meter. Meanwhile, the rapid escalation of values in Fort Bonifacio has somewhat tapered in the period, slowing by 1.52 percent to an average P400,100 per sq m,” Colliers International reports at the start of fourth quarter this year.
“Surprisingly, land-value growth in Ortigas Center outpaced the established districts, growing by 4.71 percent in the quarter to P172,700 per sq m, owing to new developments within and along the periphery of the district.” Overall, 2015 has been yet another profitable year for a lot of property developers, and has successfully created enough momentum to usher the coming year. I’ve reached out to some of our friends—all recognized thought leaders in the industry—to ask what they think will be the biggest trends in the leisure, residential, and commercial property sector for 2016.
Charlie Rufino, chairman of the Urban Land Institute Philippines and president of The Net Group
“There continues to be lots of interest in condominiums and places close to work as more urban Filipinos prefer ‘walkability.’ There will also be a more pronounced attempt to incorporate sustainability features, especially solar power, where possible, and water through the use of storm water-retention tanks for gardening and washing. Meanwhile, office buildings will put more emphasis on health and wellness by encouraging active mobility through stair usage, offering healthier food options, and putting up more green ways within a five-minute walk from offices/homes. Aside from this, there will also be a rise in co-working spaces, shared spaces and office dorms on CBD outskirts as more and more developers plan with the millennials in mind.”
Angela Litton, marketing manager of Litton & Co.
“The higher-end residential market will continue to do well in 2016. However, buyers will increasingly look for value propositions offered by developers that are congruent to their lifestyle needs and preferences. Among these lifestyle needs—and it may even be a core belief—is the principle of living with the idea of sustainability and wellness in mind.”
Tom Mirasol, president for International Sales and head of Sales and Marketing (Residential Business Group) of Ayala Land
“The rising affluence and world-consciousness of the Filipino consumer will drive demand for new shopping, dining, entertainment and leisure options. Expect to see developments that incorporate more entertainment aspects into the shopping and dining experience of traditional retail malls. Consumers these days can afford more, so they expect more.
“In today’s online world, people are expected to be productive and accessible all of the time. The time-savings and convenience of places like Ayala Land’s Estates [such as Vermosa in South Metro Manila, Vertis in Quezon City, Cloverleaf in North Metro Manila, Arca South in Parañaque, and Alviera in Pampanga] will see much more demand. A generation ago, it was ok to live in a village in the suburbs and commute to work in the city. But given how important time is today, people opt more and more to live in a more interconnected world. As a result, condominium developments in a central location will be more in demand. Everywhere, Internet connectivity via Wi-Fi will be expected.
“The office market, meanwhile, will continue to be dominated by the business-process outsourcing industry. The office will continue to expand outside of Metro Manila, prompting new developments in hot spots such as Cebu, Bacolod, Iloilo, Davao and Cagayan de Oro. Naturally, this will also support the rising affluence in these areas, and drive lifestyle demands there too.”
Buds Wenceslao, CEO, D.M. Wenceslao & Associates Inc.
“I think the biggest property trend next year in the Philippines will be about creating developments which will address the most pressing concern of everyone today: traffic and the amount of time wasted being stuck in it.
“I believe that commercial and residential developers alike will input the ‘carmageddon’ factor in all their projects. From transit-oriented developments [located near Light Rail Transit/Metro Rail Transit System stations] to improving the walkability of residential communities, you can actually see that some developers are trying to use this as a selling point in their projects. This is a trend which has been largely prevalent in more developed countries, but I think buyers and end users are also more knowledgeable about global standards in real-estate development because of two major factors: 1) traveling to other global cities have become more cost effective and easier, and 2) the abundance of content regarding planning, development and real estate available online [Atlantic Cities, Urban Land Institute, Next City, etc].”
Eric Manuel, vice president, Daiichi Properties
“The increasing competition between a variety of residential project launches across the country, combined with a growing sophistication of demand from the buyers, will widen the gap between successful and lackluster projects in 2016. Buyers will select projects that offer more than a competitive price, as well as a number of factors that reflect their lifestyle and ambitions.
“Our way of life is becoming more integrated, as the concept of live, work, play, shop and learn becomes more prevalent in projects due to an increasing amount of people moving to the cities. The urbanization rate in the Philippines emphasizes the need for developers to build mixed-use projects vertically, as land becomes scarce in the densest parts of the emerging business districts. More projects will incorporate walkability and pedestrian-friendly features, as well as answers to the growing traffic congestion problems we are seeing more and more of. Furthermore, the old silos of our lives are being blurred with technology allowing us to multitask our lives.
“As land costs rise, residential footprints are getting smaller in some markets. To counter this, developers are offering more community spaces, providing residents with the opportunity to connect to nature and socialize, even while living in smaller spaces. These amenities that focus on ‘community zones,’ such as landscaped gardens, playgrounds, gyms, barbecue areas, and function rooms, will become more commonplace. The key, though, is the programming required by developers to ensure that residents will engage and use these zones. Social media will be the enabler as more residents becoming accustomed to using social networks like Facebook, to discuss events within their building. w“Although there will be a number of ‘green-building’ residential projects that pursue either BERDE or LEED certification in 2016, the more innovative developers will move toward ‘healthy buildings’ by measuring how the project impacts the physical health of their residents. Design and construction professionals will become more aware that the built environment can create opportunities for physical activity. ‘Active Design,’ as it’s called in other parts of the world, will gain traction as a way to configure urban spaces, buildings and interiors to encourage residents’ health. Having more natural sunlight, more areas to walk/play/exercise, less air pollution, and greater focus on community, will create advantages for everyone.
“Overall, how developers design buildings and neighborhoods shapes the lives of individuals and the community. Developers need to think beyond their respective projects and see how it fits in the overall fabric of the city.”