MANILA dropped two spots to 19th in a ranking of city investment prospects in the Asia-Pacific for 2021, a joint report from the Urban Land Institute (ULI) and PricewaterhouseCoopers (PwC) said.
The 2021 Emerging Trends in Real Estate report released on Tuesday said that Manila’s prospects as a real estate investment destination have dropped over recent years. The Philippine capital ranked as high as third in 2017, then dropped to 18th a year after.
Ranking 19th out of 22 cities in the region, Manila was classified as having “fair” investment prospects this year.
ULI said Manila had fallen in the rankings due to “Southeast Asia’s reputation as a high-risk play in times of global recession.”
Topping the list this year are Singapore, Tokyo, and Sydney.
Overall scores in 2021 are not too different from the previous year, ULI said, likely due to the cities’ effective pandemic containment measures, and profitable investment opportunities.
Real estate investors said their top concerns for this year include the impact of the pandemic on property values, economic growth, trade or geopolitical tensions, and vacancy rates.
In the ULI report, Manila ranked 13th in the city development prospects ranking and 20th among cities most likely to see rental growth this year.
ULI said that there are lower scores overall for city development as developers weather “questionable” demand during a region-wide recession.
Future office demand, it added, will be decentralized to reduce commutes, which means satellite cities like Clark could signal some real estate growth in the Philippines.
“The Philippines is a good example of this, with moves afoot to establish new satellite cities, such as Clark, on the periphery of Manila, as a way to relieve the demographic stress,” ULI said.
ULI Philippines Chairwoman Jean Jacquelyn de Castro noted the decline in the country’s investment prospects ranking over recent years.
“Building back investor confidence will require stakeholders to work closely with the government to improve the attractiveness of Philippine real estate as an investment class,” she said.
Real estate services firm Santos Knight Frank Chairman and Chief Executive Officer Rick M. Santos said that the Philippines can have real estate opportunities in logistics, data centers, and industrial sectors.
“With megatrends such as e-commerce growth, decentralization outside Metro Manila, and continued outsourcing and BPO (business process outsourcing) expansion in the Philippines, we expect to see a soft rebound in the real estate market as the economy gradually recovers,” he said. — Jenina P. Ibañez