Consulting firm says Phl property mart still robust

MANILA, Philippines - With the exception of the industrial market, the country’s property sector remains robust and competitive, according to one of the leading real estate consulting firms.

In a report, Pinnacle Real Estate Consulting Services Inc. said the country’s economic fundamentals and sound investment environment continue to fuel the strong demand for the different sectors in the property market including office, residential, retail as well as hotel and gaming.

The demand for office space in Metro Manila is still robust, with occupancy ranging from 94 to 98 percent in the different business districts.

Pinnacle said the business process outsourcing (BPO) sector is relentless in its expansion fervor, thus being the biggest demand driver. Developers are pushing ahead with their projects to capture this pent-up demand.

Due to the tight supply and high demand, the company said rents had not found the ceiling.

The market is seeing pre-leasing again especially from big occupiers to avoid the space crunch, the report said.

The Makati Central Business District and Bonifacio Global City (BCG) remain the preferred office locations, followed by Quezon City, Alabang and Ortigas.

“Rental rates are increasing due to space limitations, although these are still within tolerable limits,” the report said.

It added that rents in premium grade A are still slightly higher than P1,000 per square meter per month, while rents in Grade A have an average of P750 per sq m per month.

Makati’s small and old buildings still fetch rents of P550 per sq. m. per month.

But BGC remains the place to be, with the SM Group acquiring five buildings of the Net Group with a price tag of P18 billion.

Pinnacle said Makati still caters to the corporates and traditional offices, while BGC buildings mainly cater to BPOs.

The report said that the residential market continues to be very active, and the high-end segment even stronger. Top brands such as Ayala Land, Century Properties, Filinvest, Robinsons and Rockwell have been introducing products catering to the rich and famous.

Rentals are well above P200,000 per month, depending on the floor area. Rents in the villages, given the very limited supply, remain to be strong ranging from P300,000 to P500,000 per month.