MANILA, Philippines, March 19, 2014 /PRNewswire/ -- With the Philippines' fast-paced economic growth, Metro Manila's office, residential, hotel, and retail markets will remain busy throughout the year according to the latest Metro Manila Property Outlook 2014 report by KMC MAG Group, an international associate of Savills [SVS:LN]. The shortage currently occurring in the office markets alone is expected to sustain activity -- annual take up is expected to reach 400,000 sqm in the coming years, yet upcoming stock and vacancy rate within the central business districts (CBDs) remain low at 320,000 sqm and 4.1% respectively.
As the Philippines' economic growth is fueled by strong private consumption and entry of global brands continues to increase, major local players such as SM Investments Corp. and Ayala Land Inc. continue to expand, keeping the retail sector active in the next few years. The hotel sector is also experiencing an increase in developments to facilitate the growing Philippine travel and tourism industry and Department of Tourism's target of 10 million tourist arrivals in 2016. On the other hand, the residential sector continues to attract investments due to its capital appreciation and high yield (currently 7.4%), also sustaining activity in the coming years.
"At the forefront of the country's economic expansion is the real estate market, which continued its robust performance in all property sectors," said KMC MAG Managing Director Michael McCullough. "The main focus is still on less risky prime assets within the CBDs, but a rising interest has also been observed in developments in emerging districts, where developers are launching a large number of new projects."
According to the report, the IT-BPO industry still plays a major role in the economy and real estate sectors of Metro Manila. The industry's ferocious office space take-up and limited supply drove prime net rents up to 7.2% YoY in the last quarter of 2013. It also boosts activity in the residential sector, as it increases purchasing power of the middle-class sector (currently investing in subdivisions, townhouses, and condos) and demand for premium and high-end apartments from locals with high net worth and foreign investors and expatriates.
Some of the report's highlights:
KMC MAG Group 2014 Metro Manila Property Outlook report can be downloaded here: http://kmcmaggroup.com/research/