MANILA, Philippines - The Philippine property sector is expected to continue to grow thisyear as the country is seen as one of the best investment sites in the region and as the business process outsourcing (BPO) sector continuesto expand and create demand for office space as well as other realestate developments, consultancy firm CBRE Philippines said.
“The Philippine property sector will continue to accelerate in 2014, taking off from last year’s stellar performance. Elsewhere in Asia, markets have slowed down. However and despite recent calamities, the country’s real estate sector is a buoyant market and global investorsare starting to recognize the country as a top investment spot in Asia Pacific,†CBRE Philippines chairman and founder Rick Santos said in abriefing yesterday.
He said the Philippines is now seen as one of best investment sites in the region as its economy is more stable compared to other countries given the consumption-driven nature of the domestic market sustained by the increasing inflow of overseas Filipino worker remittances along with low inflation and interest rates.
In terms of office space, he noted that from the estimated take-up of 550,000 square meters (sqm) last year, occupancy is seen to rise to 600,000 sqm this year, to be fueled by the demand primarily from BPO firms.
Joey Radovan, CBRE vice chairman and head of global corporate services, said in the same event 80 to 90 percent of demand for office spacewill come from BPO companies as the country still offers the lowestprime rent across the region at $26 per square foot per annum and hasavailable talent pool.
“What is holding companies here is the quality of labor force,†he said. Aside from BPO firms, demand for office space is seen from firms engaged in the insurance, logistics, human resources, medical, banking and finance and computer and hardware electronics industries, which are likewise growing. Santos said that as demand for office space is seen to remain strong, more property developments in the residential and retail sectors arelikewise expected to be undertaken.
“Office is the creator of demand. Once you have offices, there is a need to develop a place to live in, for retail, cinemas, etc.,†he said.
For the residential sector, CBRE Philippines senior director for research and consultancy Jan Paul Custodio said that take-up has been strong across all markets.
“This (take-up) has been the driver for developers to continue developments,†he said.
Even for high-end residential developments, he said demand is on therise due to the increase in expatriates coming to the country.