Real Estate Sustaining Robust Growth

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Manila Bulletin

Nov. 20, 2012

http://ph.news.yahoo.com/real-estate-sustaining-robust-growth-091928315–finance.html

The robust Philippine real estate is showing no signs of slowing down with vacancy rate falling, pre-leasing for office spaces been committed already for the next two years and supply is getting tighter all indicating that a bubble burst is far from happening in this sector, said global real estate services firm CBRE.

The robust Philippine real estate shows no signs of slowing down with vacancy rate falling at its lowest record and pre-leasing for office spaces been committed already for the next two years as supply is falling strong indications that a bubble burst is far from happening in this sector, said global real estate services firm CBRE.

Rick Santos, CBRE Philippines chairman and founder, said this situation is attributed to the extremely high confidence in the country on strong economic fundaments and strong leadership.

“The fiscal cliff in the US and the eurozone problem will make the Philippines to continue to be a lifeboat for US companies,” Santos said.

Joey Rodovan, CBRE Philippines vice chairman, said that despite the downtrend in vacancy rate the pipeline of new projects is good for four years.

“We are hoping that as developers build, these will fill up spaces. We have a good view for occupiers up to 2015 so there is this demand-supply situation,” Rodovan said adding that the lowest vacancy rate so far was two percent.

Among the business districts in Metro Manila, the lowest vacancy rate is being experienced in Quezon City with 0.46 percent and Alabang with 0.61 percent. Fort Bonifacio has 2.18 percent vacancy rate, Ortigas with 7.54 percent and Makati with 5.83 percent.

Lease rates are also going up with the highest rate in Makati followed by Fort Bonifacio, Alabang, Quezon City and Ortigas.

The office space take up, he said, is 80-20 in favor of BPO spaces and 20 percent for offices of multinational corporations. The financial cliff in the US is going to strengthen the Philippines as the BPO banking hub of the US.

In terms of pre-leasing commitment, Rodovan said a total of 194,678 square meters of office spaces been committed for the next two years yet. Pre-leasing commitment deals refer to office spaces that are still in the drawing board with no construction yet but been committed to future occupiers or delivery in 18 to 24 months.

“This is becoming to be a norm now for IT-BPO firms,” he said.

In terms of residential market, CBRE executive director-general for global research and consultancy Victor Asuncion said the strong demand in the residential market has been driven by the low interest rate regime and the efforts of Pag-IBIG, the shelter agency of the government to meet the huge housing backlog in the country.

He cited the very affordable interest rates of 5.25 percent of banks. This enabled Filipinos to buy condominium units during the pre-selling period.

There is also very strong OFW market noting that OFWs from the top three remittances from regions 3 (Central Luzon), 4A (Calabarzon) and Metro Manila account for 35 percent of the total OFW housing market. This also explains the concentration of housing developments happening in these regions.

Aside from these regions, Asuncion also noted of the strong condominium developments in Cebu where rates could now rival the prices in Metro Manila.

There are also robust areas like Iloilo and Davao.

“Davao is becoming a new batttlefield for big developers where condominium developments are growing in highly urbanized areas in the city,” he said.

In addition, Santos said that the move of the Bangko Sentral ng Pilipinas to closely watch for possible over exposure of banks in the real estate sector is a prudent move stressed that banks are extremely liquid.

“I don’t think there is a bubble burst,” he said.

Asuncion also said there is no borrowings for speculation purposes while Rodovan said that the amounts that borrowers are paying now is not comparable to the Asian financial crisis because of the prevailing low interest rate.( BCM)

Adchemy

Yesterday , we concluded the handover of our unit located on the 27/F of Philamlife Tower. It was a relief that we finally have access and can proceed with our minor refurbishments. Finally an official announcement can be given to our Engineers who really deserve a better facility that they can call their own.

Much of this good news and feelings of self-achievements of getting this unit would not be possible without your help and that of you most gallant employees, Mr. Francis Bautista and Mr. Philipp Llave.

Initially our head office in San Francisco was not in favor to get our own unit and moving out of Regus because of the initial capital outlay it represented. Eventually we were granted approval to start the search on the condition that it would be a tail-end of an existing lease, with no capital outlay needed for fit-out, cabling and furniture on our part. Knowing what the real estate market in the Philippines is like and our prior experience in finding office space, the situation proved very challenging, if not frustrating for us.

But with their professionalism, persistence and unique knowledge of the market, Francis and Philipp were able to find us a unit that fit the specifications of our head and negotiate a deal that was beneficial to us. To sweeten the deal further, the space they provided is just a few floors away from our existing office thus making it an easier transition for us.

Bottom line, what I am trying to say is “THANK YOU” to both most especially to Francis who’s been very instrumental on all my needs in terms of office spaces.

Keep up the good work guys!

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