Business Monitor International


Philippines Real Estate Report

Published 26 September 2014

  • 77 pages
 
$1,295.00
Philippines Real Estate Report

BMI View: The Philippines ' comm ercial real estate sector is well plac ed for long-term growth, with demand driven by a rapidly-expanding services sector and a growing and increasingly mobile population.

While less developed than other property markets in South East Asia, the Philippines' commercial real estate sector is enjoying a sustained period of expansion, with a number of factors helping the sector to close the gap on more mature markets in the region. These trends include high levels of growth across the Philippine economy. In particular, we note the rapid expansion of the services sector as the country establishes itself as a leading base for business process outsourcing (BPO). Industry association IBPAP is forecasting that the industry will make revenues of USD25bn by 2016, employing a rising number of Filipinos. The success of the industry will have a direct impact on the strength of the office real estate market, as well as indirectly on the retail market.

Other positives for the commercial real estate market include stable monetary policy, increasingly close regional economic links as well as growing numbers of tourists and remittances from Filipinos working abroad. These should boost demand for commercial space across the real estate sub-sectors we cover: office, retail and industrial.

With these factor remaining in place we are optimistic that the commercial real estate industry will continue to be a regional outperformer, with strong demand expected to support consistent rental rates rises through 2015 and beyond, as well as providing growing opportunities for new developments. While we expect demand to remain strong in the cities we cover, the capital, Manila, Makati (the financial centre) and Cebu (a centre of BPO and industry), as these cities' real estate sectors become developed, interest will likely rise in developments elsewhere in the Philippines

On the downside the real estate industry is hampered by an underdeveloped investment...

Table of Contents

BMI Industry View
7
SWOT
9
Political
11
Economic
12
Business Environment
13
Industry Forecast
14
Office
16
Table: Forecast Office Rents, 2014-2015 (USD per m2/month)
16
Table: Short-Term Office Net Yields, 2014-2015 (%)
17
Table: Long-Term Office Net Yields, 2010-2018 (%)
17
Retail
18
Table: Forecast Retail Rents, 2014-2015 (USD per m2/month)
18
Table: Short-Term Retail Net Yields, 2014-2015 (%)
19
Table: Long-Term Retail Net Yields, 2010-2018 (%)
20
Industrial
20
Table: Forecast Industrial Rents, 2014-2015 (USD per m2/month)
20
Table: Long-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
Table: Factbox - Reconstruction Assistance on Yolanda (RAY) Plan, 2014 - 2017
28
Macroeconomic Forecasts
33
Economic Analysis
33
Investment To Continue Its Charge
33
Likely Recovery In The Export Sector
35
Typhoon Yolanda To Spur Public Spending
36
Remittances Supporting Private Consumption Growth
36
Risks To Economic Outlook
37
Table: Philippines - Economic Activity
38
Industry Risk Reward Ratings
39
Asia - Risk/Reward Ratings
39
Table: Asia Real Estate Risk/Reward Ratings, Q314
39
Philippines - Risk/Reward Ratings
40
Rewards
40
Risks
40
Market Overview
42
Office
45
Table: Historic Rental Costs, 2012-2014 (USD per m2/month)
46
Table: Net Yields, 2012-2014 (%)
46
Table: Terms Of Rental Contract/Leases, H213
47
Retail
48
Table: Historic Rental Costs, 2012-2014 (USD per m2/month)
49
Table: Net Yields, 2012-2014 (%)
49
Table: Terms Of Rental Contract/Leases, H213
50
Industrial
51
Table: Historic Rental Costs, 2012-2014 (USD per m2/month)
52
Table: Net Yields, 2012-2014 (%)
52
Table: Terms Of Rental Contract/Leases, H213
52
Competitive Landscape
54
Office
55
Retail
55
Industrial
56
Construction
56
Company Profile
57
Ayala Land
57
Filinvest Land Incorporated
60
First Balfour Inc
62
Robinsons Land Corporation
64
Demographic Forecast
67
Demographic Outlook
67
Table: The Philippines' Population By Age Group, 1990-2020 ('000)
68
Table: The Philippines' Population By Age Group, 1990-2020 (% of total)
69
Table: The Philippines' Key Population Ratios, 1990-2020
70
Table: The Philippines' Rural And Urban Population, 1990-2020
70
Methodology
71
Industry Forecast Methodology
71
Sources
72
Risk/Reward Ratings Methodology
72
Table: Real Estate Risk/Reward Ratings Indicators
74
Table: Weighting Of Indicators
75

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

Executive Summary

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-2017 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 Ratings

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

The ratings 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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