By Vincent Mariel P. Galang
COLLIERS International Philippines said it is seeing a “sustained” property market over the next two years, fueled by growth in private construction backed by increasing public infrastructure spending.
“With economic growth for the remainder of President (Rodrigo R.) Duterte’s term (June 30, 2022) likely to be anchored on government and infrastructure spending, Colliers sees a sustained property market over the next 12 to 36 months,” the real estate consultancy firm said in its report “Stronger GDP (Gross Domestic Product) Bolsters Property.”
Colliers noted that the 11% increase in public infrastructure spending in the third quarter, coming from a 27% contraction in the previous quarter led to a 19.1% rise in private construction, higher than the 10.4% growth recorded, year-on-year.
“This indicates a strong appetite for office towers, residential units (condominium and house & lots), malls, hotels, and industrial parks across the country,” the property consultancy firm explained.
Colliers attributed the improved data to the growth in the country’s GDP, which was at 6.2% in the third quarter, “making the country one of the fastest growing economies in Asia ahead of China’s 6% and next to Vietnam’s 7.3% growth.”
In terms of office space demand, offshore gaming companies are the drivers of demand for the first nine months of the year. For the period ending September, these firms have accounted for 37% of closed deals, or about 442,000 square meters (sq.m.) of office space. These now take up 10% of leasable office space in Metro Manila, or about 1.14 million sq.m.
Colliers expects this to extend to the next two to three years, especially with government efforts to regulate the sector through measures like better tax collections.
“We remain optimistic that POGOs (Philippine Offshore Gaming Operators) will continue to lead office space take-up over the next two to three years especially with continued efforts from lawmakers to legitimize their operations,” Colliers said.
Co-living housing projects near major business districts will also continue to see strong demand from Filipino workers, as various infrastructure projects continue to cause heavy traffic in the capital.
“Colliers believes that these types of housing are likely to remain popular among Metro Manila employees especially as major infrastructure projects, intended to ease Metro Manila traffic, will likely continue through at least 2025,” it said.
Demand for mid-income condominium units also accounted for stronger demand. These units, worth P3.2 million to P6 million, accounted for a chunk of the take up for Metro Manila with 43%.