In 2019 the Philippine property sector remained strong amid market headwinds according to a property outlook report by Colliers International. Mirroring the resiliency of the local economy driven by massive government infrastructure spending, the real estate industry is expected to continually grow in 2020.
“There are always challenges ahead but the groundwork for a positive industry head start has already been established by the prior year,” said Federal Land General Manager Thomas Mirasol. “Thus, continuing the positive momentum of the real estate industry can be based on trends that have surfaced from 2019.”
Given the optimism surrounding the industry, Mirasol sees five key industry trends that could influence the trajectory of Philippine real estate in the next 12 months.
Booming economy and sustained demand for luxury offerings, with Manila as top locale.
In Knight Frank’s The Wealth Report, Manila ranked as top luxury property market for 2019, with an 11% annual growth on prices. The shortage in available supply in the country’s booming economy influenced expatriates and other investors to acquire their slice of real estate in the emerging Philippine market.
Mirasol notes that this increase i8 spill over to demand for high-range property offerings reflected by high pre-selling take-up for luxury condominiums in established metropolitan areas like Manila and Makati.
“The inflow of high-earning C-level executives, tourists, and investors drives the demand for high-tier properties as we’ve experienced with The Estate Makati—our joint ultra-luxury residential project with SM Development Corporation,” said Mirasol. “Even before the project was launched in September, 40 percent of the total units have already been sold.”
Mirasol also acknowledged how Philippine Offshore Gaming Operators (POGOs) have been driving demand in the property sector since the previous year, particularly in new economic hubs in the fringes of major cities.
“Chinese occupants are also sustaining the demand for mid-to luxury condominium developments as we’ve experienced with Mi Casa and Palm Beach West—two of our projects in the Bay Area,” said Mirasol. “These have all added to Federal Land’s outperformance for growth in sales in 2019 when we expanded from 11.2 billion to 22.9 billion. This growth of 104 percent takes into account revenue from joint-venture sales as well.”
Sustained Regional Development.
Outside of Luzon, further development of regional CBDs is anticipated following the government’s plans of decongesting the capital.
In Visayas for example, Cebu will continue its reign as a property investment destination with the expected influx of tourists and business investors. This also includes foot traffic driven by Meetings, Events, Conventions, and Exhibition/Events (MICE) tourism brought about by the expanding Mactan-Cebu airport. Colliers, however, notes that while rising prices in land and less developable land in the Queen City of the South is increasing demand for condominiums, developers must also scout for properties outside the main metropolis.
“Like Cebu, Bacolod and Iloilo have direct access to expatriates and tourists from different regions of Asia. We’ve noted that affluent families from those two emerging economic hubs are still investing in Cebu properties which clues us into market preferences and opportunities for development in these areas,” said Mirasol.
Increased competition influencing property offerings and amenities.
Consumers and property buyers will be the real winners in 2020. According to Colliers, the increase in supply of property developments will pressure developers to offer unique upscale amenities, as well as provide better access to office towers and shopping centers.
Mirasol said that this allows developers to exercise more creativity in projects. This exactly what they did when Federal Land launched The Grand Midori Ortigas in Ortigas CBD. The property is strategically located near business districts and retail hubs at the center between the North and South of Metro Manila.
The Grand Midori Ortigas also offers a fuss-free living indulged in Zen-inspired amenities projected to interest city dwellers looking to upgrade their home base. Adding to its appeal is its direct access to anticipated government infrastructure projects such as the BGC-Ortigas Center Link and the Metro Manila Subway.
Developers can take advantage of the government’s infrastructure push by complementing it with residential developments. Federal Land’s 10-hectare township in BGC, Grand Central Park will benefit from these transportation projects like the BGC-Ortigas Link BGC, Metro Manila Subway, and the Skytrain Monorail.
Another project, Quantum Residences along Taft Avenue, is a highly sought-after residence because of its prime location near premier colleges and universities as well as direct access to the CBDs in Makati, Manila, and Pasay city. The property caters to the mid-income market, this year’s most attractive segment, and features upgraded amenities compared to other projects in the vicinity.
“While differentiating our projects from others in the market has always been a driver of the properties we release, we see how the market taste has evolved from the practical hunt for property to the search for a residence that supports the lifestyle they desire to have,” said Mirasol.
Partnerships with international developers yielding local best practices.
“The good thing about development in this decade, is that we do not have to drive it alone,” Mirasol said. Reflecting on the performance of their launches last year, he noted that Federal Land’s most ambitious launches were a success due to the partnerships they’ve entered into particularly with The Estate Makati, The Seasons Residences, and The Grand Midori Ortigas.
Apart from the buzz created by their collaborations with Foster + Partners as well as with Nomura Real Estate Development Co., Ltd. and Isetan Mitsukoshi Holdings Ltd., Mirasol underlines that international partnerships like these keep the property sector “young” and adept to meet emerging needs. International developers entering the market encourages their local peers to embrace bold ideas while infusing the industry with best practices harnessed from their global expertise.
Opportunities blossoming for sustainable building.
Finally, with the resurgence of environmental concerns and frequency of natural calamities and disasters, the local real estate industry is expected to gear up and address climate change. According to real estate services firm JLL, developments around Asia Pacific are set to become greener and more sustainable as they employ energy-efficient technology and environmentally friendly materials.
Addressing local concerns, Mirasol lauds the presence of LEED-certified sustainable buildings but underscores disaster resilience as a crucial component of future sustainable structures as well.
Last year, Federal Land set the standard for performance-based structural design with the launch of The Seasons Residences. The integrated-use complex utilizes state-of-the-art visco-elastic coupling dampers that reduces the shaking caused by quakes as well as strong winds during typhoons.
To know more about Federal Land’s up and coming properties, visit: www.federalland.ph
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Disclaimer: This is a guest blog post by Federal Land.