Foreign developers enter Metro Manila property market
Foreign developers have entered the local property market through joint venture partnerships with Filipino companies.
“Joint venture projects with foreign developers remain attractive. In Metro Manila, local players have firmed up partnerships with foreign companies such as Hankyu Realty Co. Ltd., Mitsui Fudosan, Mitsubishi Estate, and Nomura Real Estate Development Co. to develop condominium and H&L projects in Metro Manila and Cavite,” Colliers International Philippines (CIP) said.
CIP senior manager for research Joey Roi Bondoc, in a flash report, said Colliers sees the joint venture partnerships thriving as “foreign companies are enticed by sustained residential yields in the Philippines compared to other Asian economies and firm residential demand outside of Metro Manila, including those in Cavite, Pampanga, Cebu and Davao”.
Bondoc said the fact that remittances from overseas Filipino workers rose 2.9 percent in the first half of 2019 to $16.3 billion enticed developers to either launch or broaden their residential footprint outside the country’s capital.
For example, Century Properties’ PHirst Park Homes expressed plans to expand its footprint into the affordable housing segment while Northpine Land is launching more projects in Cavite. Filinvest Land Inc. broke ground for the Mira Valley project in Rizal province.
Bondoc said while public construction decelerated in the first half, “we see ramped-up construction
in the second half of 2019 as the government catches up on its spending plan.”
Data from CIP show that office spake take-up of the business process outsourcing sector declined 45 percent in the first half to 199,000 square meters.
“We attribute the decline to the slower approval of PEZA applications in Metro Manila and uncertainty regarding the approval of the second package of the comprehensive tax reform program,” Colliers said.
Fortunately, traditional and non-outsourcing firms including those involved in healthcare services,
construction & engineering, food and beverage, flexible workspace and the professional services
sectors were growing due to sustained domestic demand.
Deals with these firms reached 271,000 sqm in the first six months, up by 22 percent from 222,000 sqm closed in the same period in 2018.
“In our opinion, to encourage increased office absorption, the government should lift the moratorium on PEZA approvals in Metro Manila and approve the measures amending the Foreign Investments and Public Utilities acts which should open more sectors such as telecommunications, transportation and retail to increased foreign participation,” CIP said.
“This should result in greater absorption of office space as we saw with international banks taking up more office space in Metro Manila following the enactment of the Full Entry of Foreign Banks law in 2014,” it said.
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