By Alessandra B. Gaborni
Developers of upscale dormitories with hotel-like accommodations, known as dormitels, will expand six fold their combined bed capacity in the next two years to meet the growing demand among young professionals who prefer to stay in relatively inexpensive quarters near their central business district (CBD) offices.
“What buoys up optimism among dormitel developers is this bit of information: almost all the dormitel properties in the pipeline are leased out,” Cushman & Wakefield Philippines said in a research paper about the thriving local dormitel market.
The study added that dormitel capacity, estimated at 1,400 beds in the Bonifacio Global City (BGC) and Makati CBD area in 2017, “will expand to 5,300 beds by 2018 and to 10,200 beds by 2019”.
Being close to work
Cushman & Wakefield noted factors that drive the dormitel market up. According to the study, “the biggest driver for employees to move into dormitel buildings is the need to locate close to their workspaces.
“With the worsening traffic in the metro, coupled with rising transportation costs, employees are better off allotting PHP 4,000 to PHP 5,000 for a space in these dorm buildings. From their dorms, it will take them something like a 20-minute walk, or an eight-peso tricycle ride, to get to their offices in BGC,” Cushman & Wakefield said.
In the report, Cushman & Wakefield listed some of existing dormitel projects.
MyTown, the trailblazer in the business, rents out 800 beds spread over its three existing locations: MyTown Paris, MyTown London, and the 653-bed MyTown New York.
Property newcomer Point Blue—which markets their 10- to 14-sqm single-occupancy rooms as micro-studios—has one operating building with a 69-person capacity.
Another local developer, DEI Properties, is operating two locations offering almost 300 bed spaces under their “iDorm at the Fort” project in the outskirts of BGC.
Other players in the BGC-Makati area include MySpace BGC, which offer 97 rooms with one- to four-person configurations, on top of a budget hotel component. BGC Hostel and Dorm, primarily a backpackers’ destination in Makati, offers bed spaces in their eight-person dorm rooms.
Ms. Gaborni is a research analyst for Cushman & Wakefield, a leading global real estate services firm with 45,000 employees in more than 70 countries.