Continued government investment in infrastructure – both soft and hard – is necessary in order for the Philippines to maximize the potential of its real estate market, according to Rick Santos, chairman of Santos Knight Frank.
Santos said “infrastructure is very crucial” for the Philippines, whose main feature is its growing economy as a result of its young demographics.
“It’s infrastructure in terms of growth: rail, airport, education. It’s the raw material. It is the value of making sure the people are educated to a certain level. Also, make people to get around better, reducing time, making it easier to fly in the country as well,” he said.
Santos Knight Frank in a statement said the infrastructure is “critical” to keep the country on the growth track.
It said the government has lined up 64 major infrastructure projects in the Philippines, several of which are underway in Metro Manila such as the North Luzon expressway (NLEx)-South Luzon expressway Connector Road, Ninoy Aquino International Airport expressway Phase 2 and NLEx Harbor Link.
It also cited mass transport projects in the pipeline such as Mega Manila Subway, Manila-Clark Railway and expansion of the Light Rail Transit to decongest the metropolis and encourage development in the outskirts.
“With limited supply of land in the city core, new districts have emerged in the outskirts of Metro Manila. The next wave of expansion is happening in emerging areas such as Alabang, Nuvali, Bulacan and Clark. It is crucial that infrastructure is in place to provide efficient connectivity between various parts of this growing city,” said Santos.
Santos Knight Frank noted Manila is fast becoming a megacity “powered by a growing pool of high-value talent, real estate expansion and a robust consumption-driven economy.”
Santos likened Manila today to Hong Kong and Singapore 30 years ago.
“The level of development in the metropolis over the last decade has been unprecedented and reflects on the accelerated expansion of the property market. Manila has since become an important hub for industries such as IT-BPO (information technology-business process outsourcing) with huge opportunities of growth for other sectors,” he said.
With a population of more than 25 million, Manila has more people than Hong Kong and Singapore combined, he added.
“Its demographic is a high-value asset in industries such as IT-BPO, where Metro Manila ranks as fourth in the world based on the 2017 Tholons Services Globalization (Outsourcing) Index,” Santos said.
“That industry will likely account for 8 percent of the Philippines’ GDP (gross domestic product) by end-2017, having employed nearly 1.2 million direct jobs last year,” he added.
Kash Salvador, Santos Knight Frank associate director for investment and capital markets, said Manila’s property market remains robust vis-à-vis other Asian cities, with prime office rents up five to six percent annually from 2011.
Salvador said most recently, prime office rents in Metro Manila increased by 3.4 percent year-on-year during the second quarter of 2017, outperforming Tokyo (3.2 percent), Taipei (2.8 percent), Beijing (-1.9 percent), Shanghai (-2.0 percent), Singapore (-5.1 percent) and Jakarta (-8.3 percent).
He noted that Metro Manila had one of the lowest vacancy rates at 3.4 percent across Asia Pacific during the second quarter.
“On a regional basis, the performance and fundamentals of the Manila office market look solid. While some of the other Southeast Asian markets are seeing demand remain sluggish and the major Chinese cities are seeing huge amounts of new supply, the Manila market has one of the tightest vacancy rates in the region and looks set for a strong 2018,” said Nicholas Holt, Knight Frank Asia Pacific head of research.
In the next four years, Manila is expected to add more than 3 million square meters of new office space.
“About 2 million sqm of residential space and half a million sqm more for retail will come online by 2019,” said Salvador.
According to Jan Custodio, Santos Knight Frank senior director for research, investor-driven demand continues to bolster the local condominium market as average sales take-up rates across major central business districts continued to exhibit double-digit figures.
“Overall percentage units sold in Metro Manila is currently at 83.5 percent,” Custodio said.
Santos said “infrastructure is very crucial” for the Philippines, whose main feature is its growing economy as a result of its young demographics.
“It’s infrastructure in terms of growth: rail, airport, education. It’s the raw material. It is the value of making sure the people are educated to a certain level. Also, make people to get around better, reducing time, making it easier to fly in the country as well,” he said.
Santos Knight Frank in a statement said the infrastructure is “critical” to keep the country on the growth track.
It said the government has lined up 64 major infrastructure projects in the Philippines, several of which are underway in Metro Manila such as the North Luzon expressway (NLEx)-South Luzon expressway Connector Road, Ninoy Aquino International Airport expressway Phase 2 and NLEx Harbor Link.
It also cited mass transport projects in the pipeline such as Mega Manila Subway, Manila-Clark Railway and expansion of the Light Rail Transit to decongest the metropolis and encourage development in the outskirts.
“With limited supply of land in the city core, new districts have emerged in the outskirts of Metro Manila. The next wave of expansion is happening in emerging areas such as Alabang, Nuvali, Bulacan and Clark. It is crucial that infrastructure is in place to provide efficient connectivity between various parts of this growing city,” said Santos.
Santos Knight Frank noted Manila is fast becoming a megacity “powered by a growing pool of high-value talent, real estate expansion and a robust consumption-driven economy.”
Santos likened Manila today to Hong Kong and Singapore 30 years ago.
“The level of development in the metropolis over the last decade has been unprecedented and reflects on the accelerated expansion of the property market. Manila has since become an important hub for industries such as IT-BPO (information technology-business process outsourcing) with huge opportunities of growth for other sectors,” he said.
With a population of more than 25 million, Manila has more people than Hong Kong and Singapore combined, he added.
“Its demographic is a high-value asset in industries such as IT-BPO, where Metro Manila ranks as fourth in the world based on the 2017 Tholons Services Globalization (Outsourcing) Index,” Santos said.
“That industry will likely account for 8 percent of the Philippines’ GDP (gross domestic product) by end-2017, having employed nearly 1.2 million direct jobs last year,” he added.
Kash Salvador, Santos Knight Frank associate director for investment and capital markets, said Manila’s property market remains robust vis-à-vis other Asian cities, with prime office rents up five to six percent annually from 2011.
Salvador said most recently, prime office rents in Metro Manila increased by 3.4 percent year-on-year during the second quarter of 2017, outperforming Tokyo (3.2 percent), Taipei (2.8 percent), Beijing (-1.9 percent), Shanghai (-2.0 percent), Singapore (-5.1 percent) and Jakarta (-8.3 percent).
He noted that Metro Manila had one of the lowest vacancy rates at 3.4 percent across Asia Pacific during the second quarter.
“On a regional basis, the performance and fundamentals of the Manila office market look solid. While some of the other Southeast Asian markets are seeing demand remain sluggish and the major Chinese cities are seeing huge amounts of new supply, the Manila market has one of the tightest vacancy rates in the region and looks set for a strong 2018,” said Nicholas Holt, Knight Frank Asia Pacific head of research.
In the next four years, Manila is expected to add more than 3 million square meters of new office space.
“About 2 million sqm of residential space and half a million sqm more for retail will come online by 2019,” said Salvador.
According to Jan Custodio, Santos Knight Frank senior director for research, investor-driven demand continues to bolster the local condominium market as average sales take-up rates across major central business districts continued to exhibit double-digit figures.
“Overall percentage units sold in Metro Manila is currently at 83.5 percent,” Custodio said.