Philippine property sector to withstand global headwinds — Colliers
MANILA, Philippines — The Philippine property sector should withstand external headwinds that are threatening the global economy amid “strong appetite” for commercial and residential spaces in the country, property consultancy Colliers International said.
In its “Trends Shaping Asian Real Estate” report released Thursday, Colliers said property developers should take advantage of the expected recovery in state spending in the second semester and expand their office, residential and hospitality footprints outside Manila.
“Developers should seize this opportunity to build more offices in key hubs outside of the country’s capital and acquire land parcels near soon-to-be expanded and modernized regional airports,” Colliers Philippines’ Ieyo de Guzman said.
The Philippine economy expanded 5.5% in the second quarter, weaker than 5.6% recorded in the preceding three months after the delayed approval of the 2019 budget disrupted public state spending.
Public construction contracted 27.2% in the April-June period, offsetting the growth posted by private construction.
According to Colliers, the expansion in private construction last quarter indicated strong demand for office towers, residential condominium, malls, hotels and industrial parks in the country.
But Colliers warned that the mood of unease may spread to property developers if anaemic state spending persists for the remainder of 2019 and stall government projects that could decongest the capital and raise land and property values outside the city.
“The public projects also help dictate the long-term plans of developers,” Colliers said.
Overall, Asian real estate remains active despite risks posed by the US-China trade war and Brexit, Colliers said.
Amid the trade war uncertainty, Asia — especially markets outside greater China — is poised to benefit should US enterprises relocate their projects in Beijing elsewhere, fueling demand in industrial and logistics segments in these markets.
“The confluence of these factors makes for an exciting time in Asia,” Colliers said.
“The region’s commercial real estate sector remains an appealing destination offering an assortment of opportunities and promising returns to all investors appraising their portfolio strategy for the remainder of 2019 and beyond,” it added.