Real Estate Projects to Watch Out for in 2016

Despite posting a slower growth of 5.3 percent in gross revenue in the second quarter of 2015, Philippine real estate remained the top employer among all industries, based on the Philippine Statistics Authority’s sectoral Quarterly Economic Indices for Q2 2015.

This same bullish outlook is shared by the country’s largest property developers, many of whom have unveiled ambitious projects that will keep them busy over the next few years. Online property portal Lamudi Philippines takes a closer look at some of the big-ticket projects we can expect to hear more from in 2016.

1. Alviera, Ayala Land

This 1,100-hectare large-scale, mixed-use development in Porac, Pampanga, is perhaps one of Ayala Land’s most ambitious projects to date. In fact, the company has earmarked Php90 billion for the project, significantly more than the company is planning to invest in its Arca South project in Taguig. The project’s Phase 1 development—which includes industrial park, a country club, three residential communities, and two academic institutions spread over 207 hectares of land—is already well underway.

2. E-com Center Projects, SM Prime

With the opening of FiveE-com Center this year, and three more office towers in the works until 2019, SM Prime’s Mall of Asia (MOA) Complex is poised to become a business district in its own right. The country’s largest mall developer already has two condo projects in the complex, three office towers, the country’s third largest mall, a convention center, and an indoor arena.

3. Westside City Resort, Megaworld Corp.

Andrew Tan-led Megaworld Corp. recently announced that it will infuse Php65 million for its integrated resort project in the Bay City in Paranaque. Dubbed Westside City (previously called Bayshore City Resorts World), the property developer’s 20th township will have a residential component boasting more than 1,230 units, in addition to a 3,000-seat opera house, shopping mall, and casino in keeping with the Bay City’s entertainment concept.

4. Federal Land and Alveo Land’s Binan Project

Early this year GT Capital Holdings through its real estate arm Federal Land and Ayala upscale subsidiary Alveo Land entered into a joint venture to develop a 45-hectare township project in Binan, Laguna. Both companies are jointly allocating a capital expenditure of Php1.9 billion for the yet-unnamed project. According to GT Capital, the project will be a few kilometers away from the planned Laguna Blvd interchange of the Cavite–Laguna Expressway and will be close to Nuvali and Ayala Westgrove Heights.

5. Clark Green City, Filinvest

In September, Andrew Gotianum’s Filinvest Land bagged the contract to develop 288 hectares of prime land in the Clark Green City, a project master-planned by the Bases Conversion and Development Authority (BCDA). The BCDA has already teamed up with the Home Development Mutual Fund (Pag-IBIG Fund) to build 2,000 affordable mixed-income housing units for the future employees working in the Clark Green City. Additionally, in August, the BCDA and the University of the Philippines signed an agreement to establish UP Clark Green City Campus in a 70-hectare area.

What Can We Expect from PH Real Estate in 2016

The Philippine economy grew at a slower rate of 5.2 percent in the first quarter of 2015, and 5.6 percent in the second, causing experts to lower their end-of-2015 forecast to around 6 percent. However, despite the turn to less impressive numbers, the local real estate market continues to thrive, and investing in real estate remains safe and ideal for the remainder of the year and for the foreseeable future.

Property portal Lamudi Philippines has listed some of the trends that are forecast for 2016.

1. Continued Growth of the BPO Sector

Business process outsourcing (BPO) companies continue to buoy Metro Manila’s commercial real estate. In fact, experts do not foresee the supply of office space surpassing demand soon, meaning commercial properties (and offices in particular) remain a beneficial investment for 2016.

Apart from the BPO companies’ direct need for real estate, investors can also look to benefit via renting out to traditional offices and commercial and retail establishments looking to take advantage of the opportunities provided by the market comprised of BPO employees. BPOs have also increased the demand in residential properties, especially high-end condos in the major business districts. With the BPO sector workforce also expected to double in 2016 and revenue from the industry to surpass remittances from overseas Filipino workers (OFW), now is a better time than any to invest in rental properties in the cities where these companies are based.

2. Continuous Appreciation of Land Values in Metro Manila

Despite slower gross domestic product growth in 2015, land values still continue to appreciate, albeit at a slower pace. According to Colliers International, growth rates of land values in Metro Manila accelerated in the second quarter of 2015. In addition, land values in the Makati central business district, growing at only 0.85 percent during the first three months of the year, rebounded in the next three by growing at a rate of 2 percent. This raised the area’s average price to Php452,704 per sqm. Values similarly rose in the business districts of Fort Bonifacio and Ortigas Center, increasing at 1.97 and 2.1 percent, respectively.

Metro Manila’s skyrocketing land prices (fueled mainly by lack of supply) drive real estate developers to look further afield for their future projects. We are already seeing a number of big-ticket projects outside the capital, such as Megaworld’s Southwoods project in Cavite and Laguna and Ayala Land’s Alviera in Porac, Pampanga.

3. Growth in Rural–Urban Fringe Areas

As a direct effect of tight supply of land in Metro Manila, rural–urban fringe areas, otherwise known as outskirts, are best described as the locations where the urban and rural transitions into each other. Developers have begun exploring rural–urban fringe for development, embarking on mixed-use projects in these areas in 2015, which will continue into 2016.

The growth in these fringe areas is projected to constitute more than a third of the annual new office supply on average for the next three years alone, indicative of the increased importance these locations have for local real estate, and making them very beneficial to those investing now or in the next year.

How Many Years Filipinos Need to Work in Order to Afford a Home in 32 Cities and Municipalities

Ever wondered how far your income could go when planning to purchase a home?

A salaried Filipino with more than 20 years of work experience may need 128 years’ worth of his salary in order to afford a house in Makati, the Philippines’ most expensive housing market, according to global property website Lamudi Philippines (www.lamudi.com.ph).

On the other hand, this same salaried worker only needs 4.16 months’ worth of his salary in order to afford a home in San Jose Del Monte, Bulacan, one of the country’s most affordable markets based on average home price.