KMC MAG Group optimistic on real estate outlook
Manila Bulletin , 11-20-2013
The sustained economic growth of the Philippines is expected to
further buoy positive investor sentiment toward the real estate
sector, according to full-service real estate firm KMC MAG
In a media briefing, KMC MAG Group Managing Director Michael
McCullough pointed out that 2013 has been a year of opportunities
for the real estate sector, owing to the consistently strong GDP
growth in the first half of the year.
"The factors behind such growth are the active construction
industry and the business process outsourcing sector, as well as
the high rate of overseas Filipino workers' remittances. Credit
rating achievements have increased investment interests in the
Philippines and a stable political climate under the Aquino
administration has also contributed to growth," McCullough
He further pointed out that key interest rates are low, offering
good debt financing opportunities for real estate. Moreover,
increased commercial and residential real estate-related loans
signal an active property sector.
"We've seen continuously low vacancy rates, as there is strong
take up within Central Business Districts. Makati continues to
attract more institutional investors due to relatively high yields
at 8-10%, and there has been an additional supply of 340,000 square
meters of space introduced this year, mainly in Bonifacio Global
City," McCullough explained.
Increased purchasing power of the middle class has sustained the
demand for subdivisions, townhouses, and condominiums. The strong
consumer spending has benefited the retail sector, translating to
an increase in gross floor area of retail space in Central Business
Districts by 337,000 square meters this year.
"Manila remains the best value city to do business, largely
because of the relatively low real estate costs, and Makati remains
to be the location of choice for luxurious residential spaces,"
McCullough added, pointing out that favorable economic conditions
and a highly skilled labor pool have attracted more international
KPO/BPO firms to come to the Philippines.
"The increase in foreign entry seen through the expanding BPO
sector also drives the residential market, especially for high-end
apartments near the Central Business Districts," McCullough
Meanwhile, Melo Porciuncula, Head of Capital Markets and
Investments of KMC MAG Group, noted that the Philippine market is
now prime for investment across all segments from development to
acquisition. "The office market offers institutional investors the
opportunities to increase cash flow and diversify portfolio. The
residential and commercial spaces, meanwhile, offer retail
investors viable alternatives for medium- to long-term investing,"
In the same media briefing, KMC MAG Group announced that it is
officially an International Associate of Savills, a leading global
real estate advisor with presence throughout the Americas, Europe,
Asia-Pacific, Africa, and the Middle East.
"Our affiliation with Savills enables us to capitalize on the
opportunities in Southeast Asia and the Philippines. Specifically,
our capabilities in asset, property, and facilities management, as
well as services in the retail and residential spaces will be
strengthened as a result of this partnership," McCullough
Savills in turn has identified the opportunities in the
Philippines, including international investors, Filipino investors
moving into overseas markets, global corporate occupiers and
retailers, high net worth individuals, family offices, and the
demand for hosting regional conferences.