Atin Ito First Filipino Community Newspaper in Ontario
Manila ranked as the fastest luxury residential price growth rate globally due to pent-up demand for prime properties, residential leasing market return, and tight development supply, particularly in central business districts, according to the latest report by real estate service provider Santos Knight Frank (SKF).
During a press conference Friday, Dec. 1, SKF reported that Manila City ranked first globally in luxury price growth at 21.2 percent this year. Manila was also the lone ASEAN country in the list.
SKF Chairman and CEO Rick Santos said, “strong investor confidence in the Philippines during the current Ferdinand R Marcos Jr. administration has buoyed the real estate market despite rising interest rates.”
“The luxury residential space is one of several sectors where we’re seeing encouraging market activity. Pent-up demand for prime properties, the return of the residential leasing market, and the tight supply of developments have contributed to significant price appreciation especially in central business districts,” he added.
Dubai with 15.9 percent price growth ranked next to Manila, followed by Shanghai at 10.4 percent; Mumbai at 6.5 percent; and Madrid at 5.5 percent.
Stockholm placed sixth with 4.7 percent; followed by Seoul with 4.5 percent; Sydney with 4.2 percent; Nairobi with 4.1 percent; and Delhi with 4.1 percent.
SKF said that commercial and residential segments showed robust performance from its post-pandemic momentum, driven by outsourcing and leasing expansion, global inflation, and cost-cutting measures benefiting the real estate market.
The consultancy firm reported that Manila’s office occupancy rate is now at 80 percent after three quarters of consistent improvement from the fourth quarter of 2022, when occupancy was at an all-time low of 75 percent.
Meanwhile, SKF indicated that BGC and Makati continue to show the highest occupancy rates in Metro Manila at 89 percent and 80 percent, respectively.
This year’s Knight Frank and Cresa’s survey revealed that occupiers in the Philippines continue to prefer quality buildings that provide good value.
During the third quarter of this year, prime buildings’ vacancy rate of 17 percent continued to surpass average office buildings’ vacancy at 20 percent, even when prime lease rates averaged at P1,244 per square meter (sqm) per month versus the market’s P980 per sqm per month, the report said.
In general, Makati City emerged with the highest lease rate in the metropolis, with a weighted average lease rate of P1,143 per sqm per month. Fort Bonifacio ranked second at P1,098 per sqm per month, followed by the Bay Area at P902 per sqm per month.
Further, SKF highlighted that the surge in buyer’s interest in second homes since the pandemic is expected to continue in 2024, with local buyers acquiring leisure properties in Metro Luzon for end use or investment.
Based on SKF’s survey in 2021, 41 percent of respondents said they were eyeing to buy a second home, a higher proportion than Asia Pacific.
As of the third quarter this year, 41 percent of condominium units sold in Luzon were leisure developments, primarily in tourist destinations like Tagaytay and Batangas, while 59 percent were traditional condominium units in urban areas, according to SKF.
This data, SKF noted, proves the growth of the vertical development market such as Cavite, Batangas, Laguna, and Pampanga.
Further, the recent report showed that there has been a significant emergence of increased customer spending termed as “revenge spending” this year.
This trend in retail sales comes at the heels of the proliferation of flagship stores and roadside retail, with the likes of international brands such as Gentle Monster, Skechers, and Gucci, among others, in areas such as Fort Bonifacio, Makati, and Quezon City.
Metro Manila’s retail stock sits at 5.1 million sqm, with Taguig holding the best-performing occupancy rate record at 93 percent in the third quarter. Meanwhile, the Bay Area recorded the lowest at 85 percent caused by the addition of new 78,00 sqm of leasable area.
Moreover, SKF cited the positive performance of the retail market impacts the logistics sector, with Manila’s warehouse lease rates jumped in the first half of 2023 by 30 percent – the highest in Asia Pacific – driven by supply chain, e-commerce, and retail activities. — Ma. Joselie C. Garcia
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Credit belongs to: www.mb.com.ph
