All sectors across real estate will be seeing continued upward growth, according to property specialist JLL in its preliminary Metro Manila Property Market Overview (PMO) report. According to JLL, this will be driven by the BPO, POGO, and other tech-driven industries.
Janlo de los Reyos, JLL’s Research and Consultancy Director Janlo de los Reyos said that vacancy levels will remain healthy at 6% despite demands from BPOs and POGOs.
“We could see interest still coming from mainland Chinese investors looking into investing 300 hectares, 500 hectares,” De Los Reyes told Rappler.
“Definitely, there is a big chunk of demand coming from China, but what we expect to see in the coming months, in the coming years, it’s going to diversify [to other industries]. We’re gonna see more industries from mainland China coming [into] the Philippines,” he added.
Despite the projected surge in Chinese businesses, JLL is positive that there will be no overheating in the sector as the demand is “contained in select areas.”
“Some developers, they’re containing this demand from certain towers, certain buildings, or certain areas just to properly manage them (Chinese businesses), at the same time, to mitigate their risk,” De Los Reyes said.
All sectors growing
Flexible workspaces are also drumming up demand for office space in Q1 of 2019.
“The continuous domination of the millennial generation in the overall Philippine employment-population will influence in the change on work culture, driving the popularity of flexible workspaces in the Philippines,” read JLL’s statement released on Thursday.
“This is seen to boost the demand for office spaces from flexible workspace providers with the millennial generation penetrating this type of work environment.”
Bacolod, Cagayan de Oro, Cebu, Clark, Davao, and Iloilo are also looking to experience a spillover of office space demand.
The report also showed that an additional 173,600 square meters (sqm) brought the existing supply of office spaces in Metro Manila to 8 million sqm. However, modest growth is expected in the coming months, based on the announced projects.
JLL added that the sustained demand for the residential sector is complemented by continuous project launches, especially with the opening of mid to luxury condominium units in the 1st quarter.
Expansion was also seen in the retail space, even outside Metro Manila. The firm credited this to the strong demand from foreign and local brands which had narrowed the vacancy rates to 3.7% in the 1st quarter.
Growth outside Metro Manila
De Los Reyes also noted that the next areas investors should be on the lookout for are Clark, Cebu, and Davao. Clark was seen as the closest area for offices for relocation.
“In terms of Cebu, we’re seeing that there’s a lot of movement in the hotel market and also in the residential market, owing to the opening of the new [airport which] brought up demand for short-term and long-term stays,” he added.
JLL’s PMO report noted that home-sharing schemes such as Airbnb and foreign budget hotel operators are also poised to supply more rooms as the government rolls out tourism-centered initiatives.
Meanwhile, De Los Reyes said that a number of BPO companies flock to Davao as well.
Source: Rappler
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