Property demand buoyed by OFW money, outsourcing needs

REMITTANCES from overseas Filipinos will bouy property demand despite the rising cost of goods and services, real estate money management and services firm Jones Lang LaSalle said.
A booming business process outsourcing (BPO) industry will also continue to prop up the luxury condominiums and office space market, the firm said in its latest Asia Pacific Property Digest.

“Consumer spending is expected to be buoyed by the sustained remittances from Filipinos working abroad,” Jones Lang LaSalle said.
“The main players SM Prime, Robinsons Malls and Ayala Malls have announced their expansion plans and are likely to further boost the demand for retail space in the near term,” it added.

With no new substantial supply, strong demand pulled the vacancy rate further downwards to 5.2% in the third quarter from 5.8% in the previous quarter.
Jones Lang LaSalle said sales would likely remain robust for luxury condominiums given demand from affluent Filipinos.

“Rental demand is also expected to remain healthy given the growing number of expatriates from the expanding business process outsourcing industry… The rising leasing demand for luxury condominiums is buoyed by expatriates working in BPO firms” it said.
“On the other hand, overseas Filipinos are still the main driver of home sales.”

Developers claim to have cornered 30% of remittances, thus roadshows have been staged in areas with a “high concentration” of Filipino workers such as the US, Europe and the Middle East.
While no new project was launched during the quarter, Jones Lang LaSalle said 1,029 units were scheduled to be completed in the last quarter. These will come from Fifth Avenue Place and Serendra District I section B and C.

“About 97% of there potential units have already been pre-committed, puching [the] vacancy rate down to 2.1%. The strong take-up encouraged established developers such as Ayala Land, Inc., Megaworld Corp. and Century Properties to launch new projects,” it added.
Capital Values went up by 4.7% quarter on quarter to P83,673 per square meter (sq.m). The average was lower then the pre-selling prices of new projects, now around P100,000 per sq.m.
Rental values inched up at a “steady rate” of 2.4% quarter-on-quarter at P6,024/sq.m./year.

The BPO industry, meanwhile, remains the key driver of the office market.
Jones Lang LaSalle said office rentals would continue their upward trend as new supply is “not sufficient to meet the growing demand.”

“Despite the current and expected huge demand for office space from the BPO industry, few developers have yet to embark on providing the much needed supply,” it added.
While no new supple was launched during the third quarter, both Net Cube and One World Square in Bonifacio Global City are in their final stages of construction.
“As expected, vacancy rate continued its downward slide to 3.4%. Currently, most Grade A buildings like Robinson Summit and Sky Plaza enjoy an occupancy rate or 100%.” Jones Lang LaSalle said.
Rentals have “moved up rapidly” in the past quarters as demand exceeds supply. The property firm said annual net rentals reached P8,081/sq.m./year.

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