Business Monitor International


Philippines Real Estate Report

Published 26 September 2014

  • 77 pages
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  • Includes 3 free updated quarterly reports
 
$1,295.00
Philippines Real Estate Report

BMI View: Ongoing improvements in the Philippine's economy have been supported by the rapidly expanding business pro cess outsourcing (BPO) industry, which is helping boost demand for commercial real estate across the country. We see particular opportunities for investors in the office market due to the strength of the BPO industry, as well as retail developers looking to benefit from the country's increasing levels of private consumption.

Despite remaining underdeveloped when compared to Thailand and Malaysia, the Philippines' commercial real estate industry has achieved continued growth thanks largely to business process outsourcing (BPO) which is fuelling a rapid expansion in the services sector. The success of this industry will significantly influence the overall strength of the office real estate segment, as well as indirectly on the retail segment.

We are expecting to see Real GDP growth of 5.9% in 2015 on the back of significant levels of inward remittances and this will bode especially well for the retail sector. Cash transfers from workers abroad rose by 5.8% year-on-year (y-o-y) to USD11.4bn in H114. Remittances have shown to have a huge impact on domestic spending power and this is quickly transforming the purchasing habits of the young and large population. These changes in the retail environment are presenting new opportunities for willing investors, not only in Metro Manila but in second-tier cities.

The industrial segment has shown weaker performance when compared to the office and retail segments; however, we expect to see growing industrial production in the medium term, which should boost demand for industrial space. With adequate support from both domestic and international investment, the Philippines has the potential to turn into a regional export hub, which will further fuel expansion in the segment.

A relatively stable monetary policy, increasing tourist numbers as well as stronger economic ties within the ASEAN are also helping...

Table of Contents

BMI Industry View
7
SWOT
9
Political
11
Business Environment
12
Economic
13
Industry Forecast
14
Office
16
Table: Forecast Office Rents, 2014-2015 (USD per square metre per month)
17
Table: Short-Term Office Net Yields, 2014-2015 (%)
17
Table: Long-Term Office Net Yields, 2010-2018 (%)
18
Retail
18
Table: Forecast Retail Rents, 2014-2015 (USD per sq m per month)
19
Table: Short-Term Retail Net Yields, 2014-2015 (%)
20
Table: Long-Term Retail Net Yields, 2010-2018 (%)
20
Industrial
20
Table: Forecast Industrial Rents, 2014-2015 (USD per sq m per month)
20
Table: Short-Term Industrial Net Yields, 2014-2015 (%)
21
Table: Long-Term Industrial Net Yields, 2010-2018 (%)
21
Construction And Infrastructure Forecast Scenario
22
Table: Construction And Infrastructure Industry Data (Philippines 2012-2017)
22
Table: Construction And Infrastructure Industry Data (Philippines 2018-2023)
23
Macroeconomic Forecasts
30
Economic Analysis
30
Remittances To Remain Supportive Of Private Consumption Growth
31
Modest Export Rebound On The Cards
32
Investment To Recover Amid Rising Business Confidence
33
Rebuilding Efforts To Spur Government Spending
34
Risks To Outlook
34
Table: Economic Activity (Philippines 2009-2018)
34
Industry Risk Reward Ratings
35
Asia - Risk/Reward Ratings
35
Table: Asia - Real Estate Risk/Reward Ratings
35
Philippines - Risk/Reward Ratings
36
Rewards
36
Risks
36
Market Overview
38
Office
43
Table: Historical Rental Costs, 2012-2014 (USD per square metre per month)
44
Table: Historical Net Yields, 2012-2014 (%)
44
Table: Terms Of Rental Contract/Leases, H213
45
Retail
46
Table: Historical Rental Costs, 2012-2014 (USD per square metre per month)
48
Table: Historical Net Yields, 2012-2014 (%)
48
Table: Terms Of Rental Contract/Leases, H213
49
Industrial
50
Table: Historical Rental Costs, 2012-2014 (USD per square metre per month)
52
Table: Historical Net Yields, 2012-2014 (%)
52
Table: Terms Of Rental Contract/Leases, H213
53
Competitive Landscape
54
Office
55
Retail
56
Industrial
56
Construction
57
Company Profile
58
Ayala Land
58
Filinvest Land Incorporated
62
First Balfour Inc
64
Robinsons Land Corporation
66
Demographic Forecast
69
Demographic Outlook
69
Table: The Philippines' Population By Age Group, 1990-2020 ('000)
70
Table: The Philippines' Population By Age Group, 1990-2020 (% of total)
71
Table: The Philippines' Key Population Ratios, 1990-2020
72
Table: The Philippines' Rural And Urban Population, 1990-2020
72
Methodology
73
Industry Forecast Methodology
73
Sources
74
Risk/Reward Ratings Methodology
75
Table: Real Estate Risk/Reward Ratings Indicators
76
Table: Weighting Of Indicators
77

The Philippines Real Estate Report features Business Monitor International (BMI)'s market assessment and independent forecasts of major construction projects in the residential and commercial markets, plus rental prices and yields in major cities. The report critically analyses the prospects for real estate within the broader economic and financial context - both domestic and global - via our econometrically-modelled and clearly explained banking and economic forecasts and follows this through to evaluate the implications for REITs.

BMI's Philippines Real Estate Report provides industry professionals and strategists, sector analysts, business investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the real estate industry in Philippines.

Key Benefits

  • Benchmark BMI's independent real estate industry forecasts for Philippines to test other views - a key input for successful budgeting and strategic business planning in the Philippine real estate market.
  • Target business opportunities and risks in Philippines through our reviews of latest industry trends, regulatory changes and major deals, projects and investments.
  • Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity).

Coverage

BMI Industry View

Summary of BMI's key industry forecasts, views and trend analysis covering real estate and construction, regulatory changes, major investments and projects and significant national and multinational company developments.

Industry SWOT Analysis

Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the real estate sector and within the broader political, financial, economic and business environment.

Market Overview

Overview of the real estate sector, including analysis of existing/planned real estate developments and emerging industry trends in the office, industrial and commercial sectors.

Market Analysis

Features detailed city-level data and analysis on rental prices, yields, contract terms and real estate availability with separate chapters covering the office, retail and industrial sub-sectors.

Industry Forecast Scenario

Historical data series (2010-2012) and forecasts to end-2018 for the domestic real estate industry and for the local and global finance industry. Indicators include:

Real Estate: Office, retail and industrial real estate yields for all major cities (%); short-term forecasts on minimum and maximum real estate rental prices by sub-sector (US$ per square metre, and local currency per square metre)

Construction: Industry value (US$bn); contribution to GDP (%); employment (`000); real growth (%)

Economy: Economic growth (%); nominal GDP (US$bn); unemployment (%); interest rates (%); exchange rate (against US$)

Business Environment Rankings

BMI's Real Estate Business Environment Rankings provide a country-comparative Risk-Reward Rankings index aimed at investors (real estate vendors, construction companies and financial investors) in the regional real estate market.

The rankings methodology makes sophisticated use of over 40 industry, economic and demographic data points.

Company Profiles

Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI's industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate Company SWOT analyses.

The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.

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Testimonials

'An essential, multi-faceted research tool. BMI’s thorough understanding of the major market players enables an informed – and informative – review of the sector’s actual performance, together with useful insights into current industry issues, which are topped-off with detailed and invaluable forecasts of industry and macroeconomic trends.’

Senior Research Analyst, ABC International Bank plc