Real Estate Continues To Have robust Investment Activity, Says Report
Yahoo! News PH, 09-10-2014
Projected to have an economic growth rate of 6-7% in the
coming years, the Philippines is expected to retain robust
investment activity, especially in real estate, according to a
In their mid-year report, KMC MAG Group has issued that Commercial
Business Districts (CBDs) will continue to enjoy the lions share of
real estate investments owing to the rise of the BPO (Business
Process Outsourcing) industry.
Demand for [real estate] will be driven by attractive yields
posted across all property types, though the focus of the investors
will continue to be in properties within the CBD, states the
Looking ahead, the strong leasing demand from the BPO sector will
drive the market for the coming years. This is expected to result
in higher rental and capital values in all real estate
Up to 160,000 sqm of office spaces were integrated into the major
CBDs within the first half of 2014. Another 140,000 sqm are
expected to be completed by the end of the year.
As for residential developments, the group issues that the market
is moving in a different direction. Developers are now projected to
focus on lower to mid-end segments, churning out smaller and more
affordable living spaces.
[O]nly projects priced at reasonably affordable levels will enjoy
higher take-up, as the target buyers are increasingly coming from
the middle class, the report reads.
[L]arge-sized units may become the bane of developers. The
high-end residential market will only have a modest growth as a
result of a weakening demand from its target market. The rates are
forecasted to increase barely over inflation by another 3-5% year
on year, keeping the gross yield within 8% to 10% spread.
Overall, the group espouses a positive outlook for the real estate
industry, citing, as well, that prime malls may enjoy a rise in
rental rates for their retail spaces, owing to a growing consumer