MILLENNIALS are now dictating the trend in real estate, industry experts noted during the 4th Asia Pacific Real Estate Investment Summit held in the Solaire Resort and Casino in Paranaque City Thursday.
Real estate consultancy firm CBRE Philippines said the country is reaping the benefits of the so-called demographic dividend, or the entry of more able, young people into the local workforce.
CBRE Philippines Chairman Rick Santos said the Philippines has one of the youngest workforces in the world, with the average age of Filipino workers at 23.2 years old, turning the “labor force into the new people power.”
The United Nations Population Fund defines demographic dividend as “the economic growth potential that can result from shifts in a population’s age structure, mainly when the share of the working-age population (15 to 64) is larger than the non-working-age share of the population (14 and younger, and 65 and older).”
Santos noted that the country’s millennials have boosted profits of the Business Process Outsourcing (BPO) companies, which have been keeping the local real estate sector busy.
He said the BPO market is taking the country by storm, as an estimated 6 million square meters of office space is added every year.
“BPOs are major drivers in building smalls cities,” Santos added.
Industry experts say companies worldwide have looked at the Philippines as a favorable investment site, especially for outsourcing some business processes, due to its educated and young workforce.
Ayala Land Hotels and Resorts Corporation’s Al Legaspi said millennials are creating a certain “less is more” trend in the hotel sector.
“Millenials are not after luxury, they’re after connectivity,” Legaspi said. “They are value-conscious. They want to make sure they put their money in things that count.”
He foresees that pricing in hotels would be more competitive, since these millennials are looking for cheaper rates.
Meanwhile, Regus Philippines Country Manager Lars Wittig said millennials also contribute to the mixed-use trend, as more young people demand more flexible office spaces.
Wittig said millennials want accessibility and connectivity, something the mixed-use market is trying to address.
He said property firms are now combining office and residential buildings into one development to give residents, mostly the young employees, an option to live near where they work.
For the retail industry, Robinsons Land Vice President for Lease Lourdes Alano said the youth-dominated BPO industry “is now fuelling the retail sector.”
She noted that the retail sector is seeing a trend in the 24/7 convenience store chain that caters to the BPO workers, since most of their operations run for both day and night.
Other panelists who were a part of the discussion were: DMCI Homes Chief Financial Officer Joseph Ramil Lombos, KMC Mag Group Managing Director Michael McCullough, Trakomatic Chief Operating Officer Shaun Kwan . Lamudi Philippines Managing Director Jacqueline Van Den Ende was the event’s moderator.