Friday, September 20, 2019

High land prices in Davao City a concern for investors

A REAL estate service and consultancy firm, Prime Philippines raised that expensive real property prices in Davao City remains as a major concern among prospective investors.

Prime Philippines’ founder and managing director Jettson Yu told reporters during Wednesday’s Habi at Kape forum at the Abreeza-Ayala Mall that despite this, they were able to convince investors to still consider Davao properties for acquisition.

He said the city’s land in prime areas, Matina and Lanang for example, are now sold at P60,000 to P120,000 per square meters (sq. m.), which equals the value of Quezon City lands some two years ago. Land prices here started to shoot up since 2015.

“But we were still able to convince some to consider Davao lands despite the high price because of the projection that the city will be in the limelight given that President Rodrigo Duterte promoted Davao as a prime business and investment destination,” he said.

He added that prices can be justified only years from now after the promise infrastructure developments in the pipeline will be realized within Duterte’s administration. He cited the projects on Mindanao Railway System, road expansion, among others.

Yu said based on the physical set up of Davao City, in terms of infrastructure, it can be compared to Laguna, Cavite, and Bulacan. If not with the projected developments in the city, land prices should be pegged only not more than P50,000 per sq. m.

“Just recently in Calamba, Bulacan we were able to close a deal at P18,000 per sq.m. (prime areas), in Davao, we can hardly find properties that can be sold at that amount in prime areas,” he said.

He underscored that most of their clients, mostly land bankers and hotel owners, who want to buy properties in Davao are investors based outside Davao City.

“A lot of investors really want to have presence or expand operations in the city,” Yu said.

For the past four months, Yu said, they were able to tour around two to three groups of investors, big and medium companies.

“In terms of acquisition of lands, all are still on the process, still on the convincing phase but in terms of leasing, we already assisted nearly 20 investors,” Yu said.

Yu emphasized that the city is indeed ripe for big investments, however, some security threats in Mindanao affect, in ways, the business climate in the area. However, investment confidence here was unfazed because of its strong and effective local governance.

“Out of all the cities in the country, you can replicate any development but the discipline of people and safety are hard to replicate, that is the best asset of Davao,”

Prime Philippines provides clients and prospective investors in-depth research and sound advice about the real estate industry in the city.
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