Colliers International: 1Q 2013 Philippine Real Estate Market Overview

Colliers International: 1Q 2013 Philippine Real Estate Market Overview



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Executive Summary


The Philippine economy is seeing momentous growth and could further expand following the
achievement of its first investment grade to BBB- by Fitch. Last year, the country gained a total
of US$2.03 billion from foreign direct inflows (FDIs), a growth of 9.8%, along with strong GDP
growth of 6.6%. Among all industries, real estate was one of the main channels for investment.
The recent credit rating upgrade suggests that activity in the property market will expand in the
long term.


Close to 200,000 sq m of new office space was introduced in 1Q 2013. This includes Glorietta 1
BPO (21,700 sq m) and Glorietta 2 BPO (23,900 sq m) in the Makati CBD. However, supply is still
seen to be muted in the business district with just a couple of buildings in the pipeline, namely
Alphaland Makati Tower (38,000 sq m) along Ayala Avenue and V-Corporate Tower (28,900 sq)
in Leviste Street, Salcedo Village. Both buildings are expected to complete in 2Q 2013 and 2Q
2014, respectively.


Across the five submarkets tracked by Colliers, 18 new residential condominiums will be introduced
this year. Collectively, these condominiums consist of 7,181 new units, about 10% higher than the
new supply delivered in 2012. Still, the majority of units fall into the smaller-sized categories of
the studio and one-bedroom segments. Only about 21% are three- to four-bedrooms, which are
required by many expatriates.


Overall, developers are highly confident with their expansion plans due to strong local demand
backed by a robust economy. In Metro Manila alone, roughly over 800,000 sq m of retail space are
currently in the pipeline and are targeted to be delivered within the next three years. Furthermore,
retail developers are expected to introduce new formats and configurations, given the increasing
competition and expanding market size.