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Residential prices in Bay Area surge 65%

Demand for residential units will remain strong this year, despite the increase in prices last year was partly driven by the influx of Chinese nationals in the country.

Real estate advisor Santos Frank Knight said residential take-up was the highest in the Bay Area despite a 65-percent increase in prices last year.

“This is driven by the Chinese investors who are eager to do business in the Philippines. But the 65 percent I think is flash in the pan because of the unique situation in the Bay Area with numerous resorts and casinos rising in the Entertainment City,” said Santos Frank Knight senior director for research and consultancy Jan Custodio.

The Bay Area refers to the reclaimed part of Manila Bay west of Roxas Boulevard and includes parts of the cities of Manila, Pasay, and Parañaque.

Santos Frank Knight president and chief executive Rick Santos said new trends would the affect real estate performance in 2018. He said that in the fourth quarter of 2019, rent increased 9 percent with a net absorption rate of 282,000 square meters.

The company said that in 2019 the office space segment would be driven by the business process outsourcing companies, traditional offices, the rising popularity of co-working spaces together with the increasing presence of Philippine offshore gaming operations.

Co-living spaces, primarily for employees, have grown popular in Makati, Bonifacio Global City and areas with high concentration of offices like BPOs, it said.

New co-living projects include First Georgetown’s Grid in Makati and Sentro in Kaaram in Naga City. Primary players in the co-living space include Ayala Corp. with the Flats and SM with MyTown.

Santos Franck Knight said about 1.2 million sqm of new office stock would be added to the market this year.

It said that in the hotel space, more than 6,4000 hotel rooms would be opened in Metro Manila until 2023, including 2,900 rooms in 2019.

International activities such as the hosting of Southeast Asian Games in the New Clark City will highlight development in emerging cities and real estate developments, it said.

It said that in 2019, malls would add 250,000 sqm of space, representing 5 percent of the current inventory, of which a large part would be dedicated to food and beverage at 45 percent.

Logistics will also expand using the “last mile” approach where most logistics companies will set up their big facilities outside Metro Manila.

Electronic commerce is expected to drive the growth of logistics as it reshapes the face retail. E-commerce in the Philippine grew 30 percent annually since 2015.

Topics: Santos Frank Knight , Jan Custodio , Rick Santos , First Georgetown’s Grid
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