PROPERTY advisory firm Colliers Philippines has reiterated its advice to residential developers to consider expanding beyond Metro Manila, citing the country’s robust economic growth as a key driver.
In its latest market report, Colliers said residential players should zero in on growth opportunities outside Metro Manila, especially in Central Luzon, Southern Luzon, Central Visayas, Western Visayas and Davao region.
“Colliers encourages developers to continue seizing growth opportunities in the above-mentioned regions. Given this strategy, ‘sustained, strategic and on scheduled infrastructure implementation’ will remain pivotal in guiding developers’ expansion,” the firm said.
It noted that the optimism in the country’s economy will continue to reverberate and spill over to other economic sectors including property development. It said that the “much-awaited interest rate cut from the central bank should further propel the country’s growth… as it will have a substantial impact on key segments including office, residential, retail, hotel and industrial.”
“‘Bound for rebound’ should be the mindset of Philippine property stakeholders despite headwinds in the market. So much focus has been put on the Pogo exodus. What observers and stakeholders need to realize is that the Philippine property market continues to expand and stand on solid and sustainable growth pillars,” said Joey Roi Bondoc, director for Research at Colliers Philippines.
“The Philippines’ encouraging gross domestic product results as of the first half of 2024 as well as a potential interest rate cut should support the real estate sector’s growth in the near term. Lower interest rates mean lower mortgage rates…”
The country’s economy expanded by 6.3 percent in the second quarter of 2024, faster than the 5.8 percent in the first quarter of this year and 4.3 percent in the same period last year.
Inflation, on the other hand, is also expected to slow down this month due largely to lower import tariffs on rice. The projected lower inflation for the remainder of the year may likely compel the Bangko Sentral ng Pilipinas (BSP) to cut policy rates. The central bank earlier signaled a 25-basis point cut starting August this year.
Besides developing residential projects outside of Metro Manila, Colliers also recommended diversification outside of Central and Southern Luzon among industrial park developers.
Bondoc said industrial park players should capture demand from major growth sectors including cold chain, electric vehicles and semiconductors. They are also encouraged to incorporate technological innovation into their warehouses; corner the constantly growing demand for cold storage assets; work with the government and other stakeholders in upskilling the manufacturing workforce; and explore launching new industrial space and building modern warehouses in emerging industrial hubs.
Among the opportunities in the cold chain sector are the rising demand for frozen food, growing online supermarket retail sales, and constantly rising food and beverage demand amid a consumption-led Philippine economy. / KOC