The international partnerships of the Philippines with other countries, particularly China is seen to accelerate the growth of the country’s real estate sector, a real estate services firm said.
In a media briefing on Wednesday, Santos-Knight Frank Inc. chairman and chief executive officer Rick Santos said that diplomatic ties the Philippines is forming with other nations presents an opportunity to gain more investment.
“As the Philippines forges new international alliances[it]attracts a wide net of investors,” Santos said.
The real estate services firm noted that with new sources of funds such as China will accelerate the growth of the real estate industry especially in the residential and industrial side.
In an earlier report, CBRE Philippines noted that the industrial sector continues to remain robust, mainly driven by the various infrastructure projects, specifically road networks and transportation access currently in the pipeline.
“Location and accessibility are two of the most important factors influencing real estate investment decisions and tourism activities,” CBRE said “This fact establishes the critical part that transport infrastructure plays in the determination of the next best location for property investment and development.”
Investment pledges made by China amount to $24 billion worth of infrastructure and financing deals with Chinese banks and companies.
With a large amount of investment pledges coming in for infrastructure development in the Philippines from China, more opportunities for the industrial spaces, particularly for the manufacturing sector could rise.
“The manufacturing sector will remain one of the significant drivers of GDP uptrend. In relation to this, it is expected that demand for manufacturing, warehouses and industrial lots will be strong, with economic zones at full-occupancy,” Santos-Knight Frank said.
“The opening of more industrial subdivisions will be beneficial to more foreign and local MSME investments, while improvement in the logistics will proivide more convenience, add accessibility to road networks and reduce traffic congestion in prime locations conducive to industrial development,” added the company.
Meanwhile, Santos-Knight Frank said it also sees opportunities to rise in the residential property market.
“Santos Knight Frank aims to leverage on Knight Frank’s strong residential presence in China to further expand the real estate industry in the Philippines,” the company said.
The company noted that the demand-drivers for the residential property market are expected to persist underpinned by the country’s sound macroeconomic fundamentals.
“Sustained investor interest, growing investments from OFWs, robust BPO sector, inflow of millennial workforce will further bolster the residential sector,” Santos Knight Frank said.
Santos-Knight Frank director for tenant representation and office agency Morgan McGilvary said that a total of 72,000 new units have come online last year.
“In terms of new supply 2016, we’re looking at around 72,000 condominium units which is quite at par with what we’ve had in the past few years and a little bit off of the 2012 high of 130,000 sqm,” McGilvary said.
Moreover, Santos expressed his overall optimism for the entire Philippine real estate market.