Philippine Property Market Report Philippines 1Q 2014
Economic growth fuels real estate sector to expand The Philippine economy expanded by 7.2% in FY 2013, the highest GDP growth in the last two years. The services sector supported the uptrend with the industrial sector gaining significant traction. Despite an increasing inflation rate, consumption spending remained buoyant as lending rates continued to be at their lowest levels while OFW remittances posted its record amount for FY 2013. To sustain the growth, the government is pursuing fiscal and monetary adjustments to ensure macroeconomic stability in the medium term.
Office Four new office buildings were completed in 1Q 2014, amounting to 75,000 sq m of new office space. By next year, close to 450,000 sq m of office space is expected to be delivered, 55% of which are located in Ortigas Center and Quezon City. Overall vacancy rates in the Makati CBD increased due to non-renewal of leases and completion of V Corporate Center. Despite the rise in vacancy, office rents in the area accelerated in the period as tenants continued to compete for remaining office space in the area.
Accelerating success.
Residential Approximately 1,500 residential units were delivered in 1Q 2014, 70% of which are located in Fort Bonifacio and the remaining 30% in the Makati CBD. Twenty new residential condominiums are expected to be turned over this year, with the majority of the units classified as studio and one-bedroom units. Premium units experienced a rise in vacancy as smaller unit cuts had some difficulties in being leased out. As a result, rental growth slowed down during the period.
Retail Metro Manila retail stock reached 5.7 million sq m, as close to 225,000 sq m of retail space was introduced to the market during the last six months. An additional 150,000 sq m will be completed by year-end. Retail developers are setting up retail with smaller configurations, as they target specific markets and locations. Demand continued to be driven by strong interest from local and foreign businesses to operate in the country.
Market Indicators OFFICE RESIDENTIAL RETAIL