Philippine properties ‘hottest’ in Southeast Asia
By Tessa Salazar
Philippine Daily Inquirer
First Posted 23:59:00 07/04/2008
MANILA, Philippines—We may have hot weather and hotheaded drivers, and “hot” money pocketed by some corrupt government officials, making life a little bit more difficult here in the Philippines. But looking at the brighter side, one “hot” item may bring back the word “pearl” in Asia’s struggling Pearl of the Orient.
The Philippines was recently declared as a popular real estate hub in Southeast Asia by international commercial real estate services firm CB Richard Ellis Philippines.
It further cited that “investment opportunities in tourism, infrastructure, mining and real estate remain high” here.
In its July 2 news release sent to Inquirer Property, CBRE Philippines general manager Trent Frankum even used the superlative “hottest” in his description of how foreign investors took up properties in the Philippines. He enumerated the positive effects of the stable Philippine peso, increasing tourist arrivals, the BPO boom, and the influx of overseas Filipino workers’ dollar remittances on the property market.
Frankum’s declaration was heard in the recently held SMART Investment and International Property Expo at the Hong Kong Convention and Exhibition Centre June 21 and 22.
Not yet overpriced
In a recent phone interview with the Inquirer Property, Joey Radovan, vice chair of CBRE Philippines, said the reason for the country’s popularity among property investors was that “we’re not yet overpriced, we’re still cheap.” He cited, for instance, that Singapore is three to four times more expensive than Manila.
Rodovan, who also heads the global corporate services, said the developers are seriously looking at the European and Middle East markets.
Rodovan singled out business process outsourcing, tourism and OFW money as major drivers putting the Philippines in the map of Southeast Asia’s most sought-after business locations.
Colliers
“Broadly agree” was the term used by Colliers International Philippines’ managing director David A. Young, when asked to react on CBRE Philippines statement that the country is the “hottest” real estate hub in Southeast Asia.
Said Young: “The Philippines’ real estate market is attracting unprecedented levels of investor from investors, most visibly in hospitality and tourism projects. A virtuous circle is evident. Capital investment in new infrastructure and tourist-related facilities is enhancing the Philippines’ offering to new markets and generating increased visitor spending.
Despite this wave of new investment the Philippines is still playing catchup relative to its regional competitors. When it completes in 2011, Kingdom’s Fairmont Hotel will be the first new luxury hotel to open in Makati for 15 years.
Tourists, hotels, condos
CBRE Philippines cited that last year, tourist arrivals broke the two-million mark for the first time since 2004, with arrivals rising to 3.091 million. CBRE said it is expecting new markets, such as Russia, Middle East, China and Korea, to help sustain tourism growth. CBRE is also projecting arrivals to increase to 3.4 million this year and generate US$5.8 billion in international tourism receipts.
Hotel room occupancy rates rose to 73.06 percent in 2007 from 71.95 percent in 2006. “New hotel and resort developments are currently in strategic business locations such as Makati City, Fort Bonifacio and the Bay Area as well as top tourist destinations such as Cebu and Boracay, further enhancing industry prospects,” Frankum said.
New development projects include the US$153 million Kingdom Hotel, a combined hotel and residential condominium that will rise in Makati City.
“We expect 18,143 units to be provided from 28 upcoming residential condominiums in Makati that are targeted for completion between 2008 and 2013. Likewise in Fort Bonifacio, 11,652 units are expected to come on the market from 33 residential condominiums being constructed from 2008 to 2012,” Frankum said.
Meanwhile, the offshoring and outsourcing (O&O) boom in the Philippines has created new opportunities for the real estate market, Frankum stressed. “Major investors and businesses are looking at the Philippines because it is one of the largest English-speaking nations in the world and has 33.5-million Filipinos in the workforce,” he noted.
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