A LUXURY condominium project is now pre-selling at a whopping P550,000 per square meter (sq.m.), making it the most expensive in Metro Manila, according to Colliers International.

“Strong demand in the pre-selling market has continued to raise residential prices, with the most expensive condominium project now priced at approximately P550,000 ($10,400) per sq.m.,” Colliers said.

While Colliers did not identify the project, it is reportedly The Estate Makati, a high-end condominium in the heart of Makati central business district (CBD) along Ayala Avenue across from Rustan’s Makati. It is being developed by SM Development Corp. and Federal Land.

“With the dearth of developable land, the most expensive pre-selling project along Ayala Avenue in Makati CBD is very attractive among investors; it being the last opportunity to own a pre-selling property in the Philippines’ primary business district,” Colliers said.

Luxury residential projects have been growing over the past three years in terms of take-up and launches. Colliers noted there is strong appetite for these projects, as developer continue to launch high-end condominiums in Fort Bonifacio, the so-called Bay Area and Makati CBD.

For the overall residential market, Colliers reported 3,700 units in Metro Manila were completed during the first quarter. This pushed Metro Manila’s condominium stock to 122,500 units as of end-March, from 118,900 units as of end-2018.

Nearly half of the new condo units delivered during the January to March period are in the Bay Area. About 1,800 units were turned over after Shore Residences Building 4 was completed.

Added supply also came from completion of the 490 units of Lincoln Tower of the Proscenium at Rockwell in Makati City, the Sandstone at Portico Tower 1 in Ortigas Center with 370 units, Verve Residences in Fort Bonifacio with 560 units, and Escala Salcedo and Two Roxas Triangle in Makati CBD with 430 units.

By 2021, Colliers expects Metro Manila’s condominium stock to reach about 142,000 units, with the Bay Area and Fort Bonifacio accounting for 75% of the new supply.

Colliers also noted average rents for prime three-bedroom units in Makati CBD, Fort Bonifacio and Rockwell Center inched up 0.8% quarter-on-quarter.

“In 2019-2020 we see rents in the three business districts rising by an average of 0.6% due to the delivery of more units before rising to an average increase of 1.0% in 2021 as the completion of new units slows,” it added.

Capital values are also rising, with the average prices of prime three-bedroom units in the secondary market in Makati CBD, Rockwell Center, and Fort Bonifacio ranging between P139,000 and P350,000 ($2,600 and $6,600) per sq.m., 6.7% higher quarter-on-quarter.

“We expect prices to increase by an annual average of 6.3% from 2019 to 2021 as we factor in the new supply,” Colliers said.

At the same time, Colliers said leasing demand for residential condominiums was “firm” in the first quarter, especially in hubs where Chinese offshore gaming companies have set up shop.

“We recommend that developers with several ready-for-occupancy (RFO) units offer creative leasing models such as co-living, highlight features of projects such as landscaping, retail options, and accessibility; and launch more mid-income units,” Colliers said.

For investors, Colliers said they should cash in on the potential capital appreciation of condominiums, as the government starts work on rail projects in the greater Metro Manila area. — V.M.P.Galang