THE PHILIPPINE real estate market is set to enjoy a “sustained upward cycle” as demand for office space combined with interest in retail, tourism and residential projects will continue to drive the sector forward, property consultancy firm CBRE Philippines, Inc. yesterday said.
A BUILDING rises in the Ortigas central business district in this photo taken on June 16. The local property sector is expected to enjoy continued growth, a consultancy said. -- JONATHAN L. CELLONA
“From a macroeconomic cycle, this is not a bubble. This is the start of a sustained upward cycle. There is a lot of demand,” CBRE Chairman Rick M. Santos said at a briefing.
Demand for office space, for instance, is expected to remain robust as business process outsourcing (BPO) firms are poised to expand, he said.
“We believe the Philippine office sector has some of the best fundamentals of all the Southeast Asian markets,” he said.
“The Philippines has some of the lowest rental rates, highest yields and greatest demand for office space in Asia,” he added.
BPO companies are continuously expanding in and outside existing hubs and central business districts like Makati, Ortigas, Fort Bonifacio in Taguig, Quezon City, Alabang and Mandaluyong, according to the consultancy.
Outsourcing firms are also tapping Cebu Asiatown IT Park, the Plazuela de Iloilo in Iloilo and Abreeza development in Davao.
“I really think the good years are ahead of us. The government looks stable, so many new players are coming in for the BPO and there is the knowledge process outsourcing companies,” Jose Luis F. Matti III, executive director of CBRE Philippines, said.
The local BPO industry employed 525,182 workers as of end-2010, with a projected additional 500,000 jobs to be created over the next five years that will demand three million square meters of office space, CBRE data show.
“They realize how good the Philippines is in terms of location and we have a very skilled work force,” Mr. Matti added.
Furthermore, increasing overseas Filipino remittances are fueling the growth in the retail and residential development, the consultancy said.
“The housing, retail and leisure segments benefit from the continued rise in remittances,” CBRE said.
In the first four months of the year, remittances rose by 5.98% to $6.2 billion and is projected to grow by 7% this year to $$20.1 billion, government data show.
For tourism, visitor arrivals grew by 13.3% in the first trimester to 1.3 million, government data show.
“The continuous growth in the tourism industry has encouraged direct investments in hotels and resort residents. Retail sector also benefits from the increased number of tourist arrivals,” it said.
CBRE Philippines started operations in 1998, offering valuation and advisory services, global corporate services, asset services and residential services.
Parent firm CB Richard Ellis is a Los Angeles-based property services firm with a $5.1-billion turnover last year through 31,000 employees in more than 438 offices worldwide. -- Neil Jerome C. Morales