Philippine property sustains robust growth
THE PHILIPPINE property market may continue to boom for six years under the Duterte administration on the back of an economic programme that boosts infrastructure spending and countryside development, KMC Savills said on Wednesday.
The office sector, in particular, is seen to remain in a sweet spot as it still offers one of the highest rental yields in the region while vacancy rates are seen to stay at manageable levels.
“The economic agenda for the country prioritises countryside development, infrastructure and agriculture growth, and increased government spending.
“Pair this with the administration’s goal of positioning the Philippines as one of the top three destinations in Southeast Asia for FDI (foreign direct investment) inflows by 2022, and we see a very positive outlook for the real estate industry,” said Michael McCullough, co-founder and managing director of the property consulting company.
“The property sector is continuing its growth momentum.
“The industrial sector, which has long lagged behind other segments, is also beginning to pick up as foreign manufacturing companies show eagerness in opening up facilities in and outside of Manila.”
In KMC Savills’ briefing, research head Antton Nordberg said Metro Manila’s performance in the first semester had been impressive, showing positive net absorption.
In the second quarter, vacancy rates tightened to 2.9 per cent from 3.7 per cent last quarter.
These rates are seen to increase in the short term, due to the completion of 259,000 square metres of leasable space by the end of the year.
Vacancy rates might start increasing but would still be below 10 per cent by next year, when office supply peaks. By end-2017 through 2018, vacancy rates are seen to go higher. Rental rates are seen to continue growing by 2.5-4 per cent this year through next year. The average rental rate in Metro Manila is 863.9 pesos (Bt643.5) per square metre per month.
