CBRE Strong Growth Of Property Sector To Continue In 2013
James A. Loyola
07 Dec 2012
Real estate advisory firm CBRE Philippines believes that the Philippine real estate sector is not showing any sign of a slowdown and the outlook for 2013 is still seen to be positive.
“We are now experiencing the best real estate market in the last 20 years. It took two decades to get the stars aligned, but now, we’re looking at sustained growth and success,” said CBRE chairman Rick Santos.
He noted that “the challenge is how to cope with this unprecedented success. Suffice it to say that, if you build it, they will come — be it office, residential, or leisure properties.”
In the office and commercial sector, CBRE shared that the country is in a unique position in Southeast Asia. Santos said the phenomenal growth of the BPO sector is akin to India’s experience in the early 90s.
The Philippines is one of the top BPO providers in the world, surpassing India in voice operations and coming in second in non-voice operations.
Santos added that there is a lot of room for expansion in other areas such as software and web graphics development, information technology and engineering services, and healthcare BPO. BPO revenues are expected to grow by 10 to 15 percent in 2016.
He noted that “the Philippines is one of the most cost effective outsourcing destinations in Asia, providing conducive environment for foreign investors through its excellent pool of skilled labor and customer service, one of the cheapest rents, and highest yields in Asia.”
Santos said the Philippines is becoming the lifeboat for many European and US companies that need to outsource in order to survive and preserve jobs in their homeland. This is evident from global banks that are now relocating in the country for back office support.
“We are a multinational player without leaving our shores. Manila is the gateway of the world—we are running the world’s businesses out of Manila,” he said.
In the residential front, the country will also experience increased real demand across all market segments, spurred in large part by the BPO sector.
Multiple credit rating upgrades, the support of the government, and positive outlook are encouraging more businesses to expand and relocate in the country creating demand in luxury destinations and leisure properties.
However, while demand for the high end market will be sustained in 2013, developers will focus more on mid-income residential market segment within the P45,000 to P80,000 per square meter range, reflecting the demand created from the growing population of families and young professionals and supported by the record-low interest rates.