Now some Manila-based property analysts believe that downtown demand will soon outpace supply, expectations that are raising rents across the entire commercial-property sector.
An article recently published quoted several property experts claiming "We expect rents to further increase by 20% over the course of 2007," and we see it no differently said Beth Collingz, International Marketing Director for PLC Global a condotel investment company in the Philippines specializing in the Lancaster Brand of Condo Hotels.
Premium-grade office capital values, meanwhile, were up 20% year on year by the end of 2006.
Manila's rental rates started their ascent in early 2005, when vacancy rates slipped below the 10% level in the central business district. Premium-segment rents rose by nearly 31% year on year in 2006, and in real terms rentals are now on par with the boom-time levels seen in early 1996. Meanwhile, rising demand for serviced residential apartments, retail space, hotels and even farm lots signal a broad-based recovery, some property analysts say.
Collingz said "This could be our biggest year, depending on the political developments in the next six months specially if the coming mid term elections are conducted well, the year 2007 could even be the biggest year for property developers considering the prevailing low interest rates."
The property recovery is being driven by three structural changes in the Philippine economy: improving fiscal and economic conditions, a rapid rise of US dollar remittances from overseas Filipino workers, and the sustained fast growth of the information-
Improved economic fundamentals, including steady 5-6% growth in gross domestic product since 2001, have helped push interest rates down to about 3%. That, in turn, is encouraging people to take their money out of low-interest rate-earning bank accounts and into what they hope are higher-yield property investments. Banks are even offering 25-year mortgages at fixed interest rates, enticing more middle-income earners to take the property plunge. "That's totally unheard of in the history of the country and our Condotel investment properties offering from 12%-16% rental returns per annum fit the bill” said Collingz
As with most Philippine economic phenomena, overseas foreign workers are a driving force behind the current boom. Remittances by overseas workers have doubled over the past five years from $6 billion to about $14 billion, driven by the increasing globalization of the Philippine labor market.
Those global wages are in turn boosting the spending power of the local market. Last year 87% of our Condotel sales were accounted for by overseas Filipinos, up significantly from the 56% in 2005, and more than double the 26% seen in 2004. That's in large part because a growing number of professional and high-skilled Filipino workers are taking higher-paying jobs overseas but investing their earnings at home.
Changing demographics – the Baby Boomers - are also a factor in today’s market place. Overseas Filipinos who left in the 1960s and 1970s are coming back and looking at the possibility of retiring here. Others have started opening business operations in the Philippines.
Foreign Nationals are legally allowed to purchase as much as 40% of the total number of condominium units on the market at any given time. Overseas Filipinos and more and more foreigners are now emerging as a market for condotel units. Many or our clients are coming from different countries like South Korea, Australia, United Kingdom, Saudi Arabia and other parts of the Middle East," Collingz said.
PLC Global is the lead International Marketing Partners for Pacific Concord Properties, Inc., Flagship Lancaster Suites Condotel [Manila] development located along Shaw Boulevard, Mandaluyong City, Metro Manila, one of the hottest Condotel Investments in the Philippines
The current selling price [effective March 1, 2007] for the Lancaster Manila Atrium Tower A Tax Exempt Studio Units is Pesos 75,888 or $1,615.00 per sqm. The One Bedroom, Two and Three Bedroom Suites are priced at Pesos 84,994.56 or $1,808.80 per sqm including Government Taxes [R-Vat 12%]. Units may be purchased on a Six Year No Interest Charge Term of payment or longer term "In-House" financing plans. Turnover of units for Tower A will be from December 2009/2010
For further info on Philippine Condotel Investments please do not hesitate to contact us
