Thought Leader: Michael McCullough on the Business of Real Estate in the Philippines
The real estate "boom" in the Philippines has opened a lot of opportunities for real estate firms and professionals to make all-time career sales highs. However, the "boom" also posed a challenge for some to repeat their successes amid growing, tech-savvy, and equally aggressive competition.
So what's in store for the real estate professional who's aiming to build a sustainable career in the real estate industry? We talked with Michael McCullough, Managing Director of KMC Savills Inc, a top full-service real estate services firm, to gather insight on the real estate professional's playing field today and in the next decade.
What does your business specialize in?
KMC Savills is a real estate brokerage that specializes in office leasing. We also offer residential services too.
What's different about the Philippines Real Estate industry today, vs. 5 years ago?
There's many more opportunities in the market now than there was 5 years ago. There has been an influx of tenants from the BPO industry and many new developers who want to build offices. This creates opportunities for companies such as ourselves to help facilitate companies locating office space.
What will it be like in another 5 years? 10 years?
We think that growth will not be as fast but we anticipate a steady rate of growth that is positive for firms wishing to relocate here and also businesses like ours who can help businesses start up in the Philippines.
How has technology changed the way Professionals sell or lease properties today?
The rise of the internet has altered the office leasing market, email campaigns, presence on social media, and our website have to be effective to ensure people know about KMC Savills, the services we can provide, and how to contact us.
Metro Manila traffic has gotten far worse in the last few years. How is this influencing what developers focus on?
The traffic here is an issue and does impact the ease of doing business here. It's also very unpredictable. The government is taking steps to improve the situation but it's still far too slow.
Developers will continue to focus on residential developments within the CBDs which includes bed space like My Town, additional mid market studios for young professionals, and affordable first time condos for starting families. You'll also continue to see high rise developments along EDSA and MRT stations.
We've been in a "boom" market for a long time, will this last?
It's difficult to predict, in the backdrop of slowing global growth the Philippines is still growing. There is definitely potential for the 'boom' to continue in the near future but it's difficult to predict whether this can sustain over a longer period of 5 years onwards. The economic dividend that we have will continue to create real demand for 5M+ residential units. Affordability and connectivity (infrastructure) will either hinder or help this growth.
Where do you think land values are most likely to grow in the next few years?
I think that with most of the BPO offices being based in Metro Manila it's safe to predict that there will be continued growth in land values in the various townships here. I predict that BGC and neighboring Makati will continue to grow steadily. I would watch land values rise significantly when new infrastructure projects go live such as MRT 7, LRT extension, etc.
How has home financing changed?
Not much, developers are becoming more lenient these days with a typical 15/20% down payment that can be deferred over a maximum of 3 or 4 years as a general rule. I can't wait to see Fintech dominate this space in the next 3-5 years. Financing units purchased on the secondary market can take up to 6 months. This has a lot of room to improve.
What advice do you have for Philippines Real Estate Professionals today? How can they get an edge on the competition?
By building strong relationships with clients and really investing in these relationships. When you do business here, as well as having a passion for real estate, you have to strive to provide outstanding service to your client. What does your client want? How can you help them get it to the best of your ability? My main advice would be to focus on that. Also continuing education, we continue to invest heavily in our teams and send them to training seminars around the region.
What changes do you expect in the industry from the new administration?
It's hard to predict, on the safe side the president is a man of action. If he concentrates on the infrastructure, then it could really benefit the prospects of doing business here. Investment in roads, public transport and any improvements to the rules on foreign ownership should make doing business here much easier. If he makes getting around Manila easier, it'll be an incentive to investors, developers and businesses to relocate or expand into the Philippines.
This article was originally published on Zipmatch.com