COLLIERS International Philippines has projected a sustained robust property market over the next three years, citing economic growth optimism.

In a Nov. 28, 2019 research note, the property consultancy firm said the uptick in gross domestic product (GDP) growth in the third quarter is a boon to the property sector.

Colliers sees the economic growth being supported by an improved credit rating, decelerating inflation and a higher ranking in global competitiveness surveys.

Joey Bondoc, senior research manager, said Colliers is encouraging both landlords and tenants to further explore opportunities in the property market.

Developers must look into identifying expansion sites and alternatives for outsourcing and offshore gaming firms, developing co-living and mid-income projects and housing flexible workspace operators.

The Philippine economy expanded by 6.2 percent in the third quarter of 2019, as the government ramped up its spending on infrastructure.

Growth last quarter makes the Philippines one of the fastest growing economies in Asia.

The improvement was mainly government spending-driven, with public construction rising by 11 percent in the third quarter from a 27 percent contraction in the second quarter.

Private construction also rose by 19.1 percent, sustaining the 10.4 percent growth posted in the third quarter in 2018.

“This indicates a strong appetite for office towers, residential units (condominium and house and lots), malls, hotels and industrial parks across the country,” Bondoc said.

For instance, Colliers has noted the sustained growth of the property business in Cebu as new projects continued to penetrate the market.

In recent years, Cebu has emerged as a major real estate hub outside Metro Manila, housing major residential, office and commercial projects.

Provincial major cities such as Cebu, Mandaue and Lapu-Lapu have continued to see the rise of both residential and commercial buildings as developers ramp up expansion in one of the country’s promising property hubs.

Office space

Bondoc said the realtor sees growing demand for office space from offshore gaming operators and English as a Second Language (ESL) firms.

“Overall, Cebu will benefit from sustained demand from Pogos. In Manila these have been expanding and they have started to look for space outside the capital region due to the lack of space in major business hubs in Manila, where vacancies are at a mere 0.5 percent to one percent,” he told SunStar Cebu.

“The demand from ESL firms should be sustained by Cebu’s competitiveness as an ESL hub. This can be attributed to the availability of hotels and residential units, quality office space and college graduates that speak good English,” he added.

Bondoc also sees continued growth in the mid-income condominium market in Cebu.

“This is the segment where condominium units are priced from P3.2 million to P6 million per unit. This is the sector driven by the overseas Filipino workers, foreign tourists and business process management employees, both locals and expats,” he noted.

Cebu is projected to benefit from a sustained macroeconomic growth throughout the country. This should be facilitated by improving infrastructure and continued decentralization push from the national government.

“Another bright spot is the leisure sector which we see having a positive impact on hotel occupancy (average of 75 percent for Metro Cebu with four-and five-star hotels dominating) and residential take-up, especially in Mactan and Mandaue areas,” the research manager said.

Over the next 12 to 36 months, Colliers sees the growth in the property industry sustaining on the back of a bullish economic outlook moving forward.