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|Philippines Commercial Property Market|
The Philippines commercial property market is expected to be adversely affected by the global financial market turmoil and associated economic downturn in 2009. This situation is exacerbated by a glut of available office space in recent months, putting downward pressure on prices. The following is an overview of the Philippines commercial property market and related services provided by Asia Property Consultants:
Capital values in the Philippines commercial property market are expected to show declining trends, especially in the premium grade offices. According to the Q1 2010 Business Expectations Survey undertaken by the central bank of the Republic of the Philippines, there was significant improvement in business sentiment. The overall confidence index (CI) rose to 39.1% from 22% in the previous quarter.
According to the 2010 Colliers International Market Report, land values in the Makati CBD declined, largely due to commercial rents reaching a low point. As interest in the Makati CBD region improves so will land values.
Vacancy in Makati CBD office buildings continues to fall in the first three months of 2010 in most sub-markets. Premium grade building vacancy remains at 12% while Grade A vacancy declined from 8.9% in the last quarter of 2009 to 7.1%.
Average office rents in Makati CBD were stable throughout 2010, ending a period of six successive quarterly declines. With a positive outlook for Philippines’ economy and a significant improvement in business sentiment, average rents are forecasted to rise over the coming year and demand for Premium grade buildings will continue to increase.
CB Richard Ellis (CBRE) points to two areas that could help maintain strength in the Philippines commercial property market. These are:
The business process outsourcing (BPO) sector. The take-up of office space by BPO companies in the past three years helped build the Philippines commercial property market. Despite challenging current market conditions at present, demand for BPO from multinationals is expected to remain robust, due largely to the Philippines’ lower labour costs compared to other countries. The Business Processing Association of the Philippines has set up a group called Team 2010 which has the objective of capturing 10% of the global market share by 2010. Consultancy A.T. Kearney, ranked the Philippines fourth in the world behind India, China, and Malaysia as the most desirable global services locations which are competitive for business process outsourcing, a significant rise from being outside the top 10 three years ago.
Philippines tourism growth. Visitor arrivals are expected to reach 3.4 million during 2008, a 13% increase from 2007. The increased tourist numbers, government spending on infrastructure, reduced oil prices all contribute to making the Philippines a cheaper alternative and more competitive with other markets such as Singapore and Hong Kong.
Asia Property Consultants assists international entrepreneurs and investors with an array of property management services for their Philippines commercial property market investment. Such services include i) Arranging property insurance, ii) implementing property security measures iii) project managing property maintenance requirements iv) appointing a reliable agent to find tenants
For more information on the Philippines commercial property market, call our Singapore office at (+65) 67350120 or email us here
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