Despite fast-rising consumer prices and interest rates, residential condominium takeup in Metro Manila hit a record high in 2018 and home buyers demanded for more aside from the new units brought to the market by property developers.
However, this record takeup may be difficult to replicate this 2019 as new launches may slow down due to the dearth of available land in the metropolis and lofty prices of land in major central business districts (CBDs), property consulting firm Colliers Philippines reported yesterday.
Condominium presales covering major central business districts reached 54,000 units last year compared to 53,000 units in 2017, Colliers manager for research Joey Roi Bondoc said in a briefing. He noted a strong takeup for affordable to middle-income units or those within the P1.7 million-P5.9 million range.
The volume of residential condominium units sold ahead of completion last year exceeded the 43,000 new preselling units rolled out by property developers. Such newly launched inventory increased from 36,000 in 2017 and 35,000 in 2016.
With a more benign inflation environment this year, which in turn will likely prevent further interest rate increases by the local central bank, Colliers believes that demand from the affordable and mid-income residential segment would be sustained this year.
Still, “it’s hard to predict launches because it depends on the landbank of the developer. In (CBDs), they can redevelop a parking lot into a residential (area), or buy property or go into joint ventures. But prices are so high now and others (landowners) don’t want to sell,” said Colliers Philippines’ Richard Raymundo.
“It depends now on your view (as a developer). You can go to Quezon City, where it’s a bit more affordable. You’ll be a first mover, but there’s that risk,” he said.
The groundbreaking for the Manila subway—the most expensive infrastructure project approved by the government—is seen to benefit Quezon City as seven of the 13 metro stations will be in this city. The most populous city is also seen to benefit from improved connectivity from the construction of Metro Railway Transit 7 and the common LRT-MRT station.
Integrated estates similar to those developed by Ayala Land and Eton Properties are thus seen to rise in Quezon City.
Colliers also sees bright prospects for new residential towers in Ortigas to complement the development of new office spaces in this district from 2019 to 2021.
Due to the scarcity of available land in Makati and BGC, Colliers urges residential developers to look for opportunities in fringe areas.
Furthermore, residential property developers are now also looking for opportunities outside Metro Manila like Pampanga, Cebu or Davao.
Given strong demand from Chinese investors, Colliers expects the Manila Bay area to overtake the residential condominium market in Makati central business district by 2021. Developers here were advised to focus on projects for the upscale market or those priced at over P6 million per unit.
Colliers believes that luxury condominium demand in Metro Manila would remain strong due to rental yields—which at an average of 5.1 percent is still one of the most attractive in the region—alongside sustained requirements from affluent Filipinos, foreign investors and offshore gaming firms.
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Lalamove Philippines expanding services to Pampanga
Lalamove Philippines on Wednesday announced plans to expand its delivery services to Pampanga, citing a growing need for logistics services in areas outside of Metro Manila.
On the sidelines of the AVCJ Private Equity & Venture Forum, Lalamove Philippines managing director Dannah Majarocon said the company is looking to expand to several areas.
“We are looking at moving into another city by the first half of next year. It’s a toss-up, but we are leaning more towards Pampanga because it makes a lot of sense,” she said in an interview with GMA News Online.
“Our business clients in Manila want to have items delivered all the way to Pampanga and from Pampanga to Manila, plus you have another port that is in that area,” she said.
Lalamove offers delivery services in over 100 cities across Mainland China, Southeast Asia, and India. In the Philippines alone, the company has over 45,000 partner drivers catering to clients in Manila and Cebu.
“Eventually, we will move into other cities further south. We’re still deciding if we’re gonna go Davao or Iloilo, but the most logical next phase for us will be where the central business districts are,” said Majarocon.
The company is banking on the growing need for logistics services, as it has continued to register positive growth in terms of delivery orders.
“It’s hard to fully determine or to fully attribute if it’s because of traffic because the growth of Lalamove has continuously compounded every single week, every single month, ever since we started here,” she said.
“Growth has been ‘exponentially fantastic’ for lack of a better term, and I would attribute that more because we are addressing a need in the market,” Majarocon added. —GMA News
Megaworld to build P1.8-B mall in Pampanga
MEGAWORLD Corp. is spending P1.8 billion to construct a new mall inside its Pampanga township Capital Town.
In a statement Monday, the listed property developer said Capital Mall will offer 33,000 square meters (sq.m.) of gross floor area across three storeys. The mall will make use of materials recovered from the sugar mill owned by Pampanga Sugar Development Corp. (PASUDECO), which used to stand on the site of the township.
“As a tribute to the legacy of Pampanga’s oldest sugar mill, we will build the Capital Mall with its rich cultural heritage in mind. Other recovered portions of the sugar mill such as the giant bull gears, sprockets, and mechanical parts will become part of the mall’s interiors,” Megaworld Chief Strategy Officer Kevin Andrew L. Tan said in a statement.
The mall will have four cinemas, a food hall, and a shophouse strip. It will likewise feature a landscaped garden that will have restaurants and cafés surrounded by water ponds and century-old trees.
“Even the food hall will sport an industrial architecture highlighted by more mementos of the sugar central. The cinemas will also feature the 1960s charm and ambiance,” Mr. Tan said.
Megaworld will start construction by the first half of 2020, with target completion in 2022. Via www.bworldonline.com.
PH now Australian business’ top expansion destination
Australian businesses in Southeast Asia have picked the Philippines as the most preferred destination for their expansion, a recent survey showed.
The Philippines has become the most popular market for Australian companies looking to expand, after being picked by 24 percent of survey respondents in the latest edition of Australian Business in Asean.
This marked the first time the country became the top pick of Australian businesses since the annual survey began in 2016.
The survey said 80 percent of businesses in the region plan to expand their operations by 2023, citing the growing middle class in Southeast Asia as among the factors that fueled their bullishness.
“The Philippines is now the most prominent destination for future investments, overtaking Vietnam in 2017 and Myanmar in 2016,” the 2019 survey read.
“Philippine trade with Australia has increased significantly over recent years while there has also been growing Australian investor interest in the Philippines,” the survey said.
Traffic congestion in the country, however, was identified as a “high-impact constraint on business” by the majority of respondents, followed by government bureaucracy and the tax system.
More than one-third, or 36 percent, of Australian companies here in the Philippines have been operating here for more than two decades.
The survey said companies continued to be attracted to the market, citing that 14 percent of the respondents had been operating in the country for less than two years. —ROY STEPHEN C. CANIVEL