BY: CHAMBER OF REAL ESTATE AND BUILDERS' ASSOCIATIONS, INC.
April 29, 2020
POSTED IN: Local Industry Snapshots
By: The Manila Times The Manila Times | April 28, 2020
REAL estate developer Federal Land Inc. is optimistic that the local real estate industry is expected to continually grow in 2020 despite the challenges it has been facing.
â€œThere are always challenges ahead but the groundwork for a positive industry head start has already been established by the prior year,â€ said Federal Land General Manager Thomas Mirasol. â€œThus, continuing the positive momentum of the real estate industry can be based on trends that have surfaced from 2019.â€
Mirasol sees five key industry trends that could influence the trajectory of Philippine real estate in the next 12 months.
Booming economy and sustained demand for luxury offerings, with Manila as top locale In Santos Knight Frankâ€™s â€œThe Wealth Report,â€ Manila ranked as the top luxury property market for 2019, with an 11-percent annual growth on prices. The shortage in available supply in the countryâ€™s booming economy influenced expatriates and other investors to acquire their slice of real estate in the emerging Philippine market.
Mirasol points out that this increase is a spill over to demand for high-range property offerings reflected by high pre-selling take-up for luxury condominiums in established metropolitan areas like Manila and Makati.
â€œThe inflow of high-earning C-level executives, tourists and investors drives the demand for high-tier properties as weâ€™ve experienced with The Estate Makati â€” our joint ultra-luxury residential project with SM Development Corp.,â€ said Mirasol. â€œEven before the project was launched in September, 40 percent of the total units have already been sold.â€
Mirasol also acknowledged how Philippine offshore gaming operators have been driving demand in the property sector since the previous year, particularly in the new economic hubs located at the fringes of major cities.
â€œChinese occupants are also sustaining the demand for mid to luxury condominium developments as weâ€™ve experienced with Mi Casa and Palm Beach West â€” two of our projects in the Bay Area,â€ said Mirasol. â€œThese have all added to Federal Landâ€™s outperformance for growth in sales in 2019 when we expanded from P11.2 billion to P22.9 billion. This growth of 104 percent takes into account revenue from joint-venture sales as well.â€
Sustained regional development
Outside Luzon, further development of regional central business districts (CBDs) is anticipated following the governmentâ€™s plans of decongesting the capital.
In Visayas for instance, Cebu will continue to reign as a property investment destination with the expected influx of tourists and business investors. This also includes foot traffic driven by the meetings, events, conventions and exhibition/events (MICE) tourism brought about by the expanding Mactan-Cebu Airport. Colliers International, however, notes that while rising prices in land and less developable land in the Queen City of the South is increasing demand for condominiums, developers must also scout for properties outside the main metropolis.
â€œLike Cebu, Bacolod and Iloilo have direct access to expatriates and tourists from different regions of Asia. Weâ€™ve noted that affluent families from those two emerging economic hubs are still investing in Cebu properties which clues us into market preferences and opportunities for development in these areas,â€ said Mirasol.
Increased competition influencing property offerings and amenities
Consumers and property buyers will be the real winners in 2020. According to Colliers, the increase in supply of property developments will pressure developers to offer unique upscale amenities, as well as provide better access to office towers and shopping centers.
Mirasol said this allows developers to exercise more creativity in projects. This exactly what they did when Federal Land launched The Grand Midori Ortigas in Ortigas CBD. The property is strategically located near business districts and retail hubs between the north and south of Metro Manila.
Developers can capitalize on the governmentâ€™s infrastructure push by complementing it with residential developments. Federal Landâ€™s 10-hectare township in Bonifacio Global City (BGC), Grand Central Park will benefit from these transportation projects like the BGC -Ortigas Link, Metro Manila Subway and the Skytrain Monorail.
Another project, Quantum Residences along Taft Avenue, is a highly sought-after residence because of its prime location near premier colleges and universities as well as direct access to the CBDs in Makati, Manila and Pasay City. The property caters to the mid-income market, this yearâ€™s most attractive segment, and features upgraded amenities compared to other projects in the vicinity.
â€œWhile differentiating our projects from others in the market has always been a driver of the properties we release, we see how the market taste has evolved from the practical hunt for property to the search for a residence that supports the lifestyle they desire to have,â€ said Mirasol.
Partnerships with international developers yielding local best practices
â€œThe good thing about development in this decade, is that we do not have to drive it alone,â€ Mirasol said. Reflecting on the performance of their launches last year, he noted that Federal Landâ€™s most ambitious launches were successful due to the partnerships they have entered into particularly with The Estate Makati, The Seasons Residences and The Grand Midori Ortigas.
Apart from the buzz created by their collaborations with Foster + Partners as well as with Nomura Real Estate Development Co. Ltd. and Isetan Mitsukoshi Holdings Ltd., Mirasol underlines that international partnerships like these keep the property sector â€œyoungâ€ and capable of adjusting to emerging needs. International developers entering the market encourages their local peers to embrace bold ideas while infusing the industry with best practices harnessed from their global expertise.
Opportunities blossoming for sustainable building
Finally, with the resurgence of environmental concerns and frequency of natural calamities and disasters, the local real estate industry is expected to gear up and address climate change. According to real estate services firm JLL, developments around the Asia-Pacific region are set to become greener and more sustainable as they employ energy-efficient technology and environmentally friendly materials.
Addressing local concerns, Mirasol lauds the presence of LEED (leadership in energy and environmental design)-certified sustainable buildings but underscores disaster resilience as a crucial component of future sustainable structures as well such as The Seasons Residences, which has features that enable it to withstand shaking caused by earthquakes and buffeting from strong winds.