THE Philippines and Vietnam emerged as the strongest performing markets in Southeast Asia in 2015, Asian industry magazine Property Report said.
The magazine said the Philippines continued to be a “solid performer” in the past year, mainly driven by the robust business process outsourcing (BPO) industry.
“The Philippines has continued to be a solid performer and although analysts are predicting a slight slowdown in growth, they see plenty to be positive about, especially in an office market, likely to be the beneficiary of a thriving BPO sector,” Property Report said.
Sigrid Zialcita, Cushman and Wakefield managing director of Asia Pacific research, said the BPO industry is the country’s growth pillar, driven by the country’s sound economic management, a stable political landscape, and a large, young, and well-educated population.
Zialcita projected the BPO sector to continue growing in the next five years.
“The next five years could still see BPO companies enlarging their footprint across the country to ensure high occupancies and a platform for long-term, moderate rental growth of more than five percent,” she said.
Vietnam was also one of 2015’s biggest real estate success stories, according to Property Report.
It said Vietnam’s property market is riding into another boom, with the construction of its economic hub in Ho Chi Minh City.
“This retrenchment after the crisis of just a few years ago has been due to various factors, including state purchase of billions of dollars worth of non-performing loans, stronger financial requirements on developers, and government stimulus,” Property Report said.
CBRE Vietnam director for research, Dung Duong, sees an optimistic outlook for the Vietnam property market in the coming years.
“The property market in Vietnam has been supported by a stable economy and, due to the growing strength in the US dollar, the Vietnam dong has become one of the strongest currencies in the Asia Pacific region,” said Duong.
“Both decreasing interest rates and a strong currency are expected to attract foreign investors,” he added.
Jones Lang Lasalle Managing Director for Singapore and Southeast Asia Chris Fossick shared the same sentiment, emphasizing that Vietnam and the Philippines are the two countries that investors are most confident about this year.
“Business confidence, I suppose, is the opportunities that they see. Those decisions will be based on the ability of the economy to grow in 2016, and the opportunities that it provide,” Fossick said.
Fossick also affirmed BPO as still the biggest driver of the property sector’s growth in the Philippines.