Riding Manila’s new growth momentum
By Timothy Tay
/ EdgeProp Singapore |
The Velaris Residences is a landmark residential project by international developer Hongkong Land, and local real estate giant Robinsons Land. (Picture: Hongkong Land/Robinsons Land)
SINGAPORE (EDGEPROP) - There is a wave of optimism that the Philippine economy will strongly rebound this year from the Covid-19 pandemic as businesses gradually return to full capacity. The promise of new political leadership is also helping to boost sentiment among investors.
This bodes well for the residential real estate sector, especially in the key Metro Manila market. With more companies recalling their employees back to offices, demand for condominiums around Metro Manila is gaining traction, says Cushman & Wakefield Philippines.
According to an investment market report the consultancy published in May this year, the Philippine residential market entered 2022 on the back of a better-than-expected performance in 4Q2021. The easing of mobility and business restrictions that started last year saw the average price of condos in Metro Manila increase 5% y-o-y in 4Q2021.
Cushman & Wakefield expects sustained growth in the Philippine economy, reaching 6.5% for the whole of 2022. However, there are still downside risks that stem from rising inflation and expected interest rate hikes this year.
Prime time to buy
According to Colliers Philippines, this is a prime time for investors and home buyers to capitalise on the expected growth momentum in the residential market, which is on a clear path to recovery buoyed by supportive macroeconomic factors.
According to Colliers, key factors supporting the residential market this year will be the government-projected economic rebound, continued inflow of remittances from Filipinos working abroad, and the easing of mobility restrictions that will raise business and consumer confidence.
These factors present opportunities for the property market and generate positive sentiment in the residential segment, the consultancy says.
Sentiment in Manila’s residential property market is strong as buyers and investors bank on the country’s economic recovery in 2022. (Picture: Pixabay)
Developers are expected to continue their land-banking initiatives within Metro Manila while continuing to offer attractive payment schemes to draw in more home buyers, says Colliers. The consultancy expects that for the whole of 2022, the demand for residential units in the secondary market in Metro Manila is likely to be driven by local and foreign professionals returning to the office.
Meanwhile, new housing supply could come in at about 10,500 units for the whole of this year, up 20% y-o-y. Most of the new supply is expected to be around the Manila Bay area, which includes neighbourhoods such as Fort Bonifacio and Ortigas Centre, says Colliers.
“The Makati CBD, Fort Bonifacio, and Ortigas Centre remain attractive to firms that are planning to expand their offices in Metro Manila. In 2021, these business districts accounted for 45% of total office space deals,” says Colliers.
The consultancy adds that as more employees return to work in the office, this will help to stoke residential leasing demand in these key locations. Developers with a substantial number of ready-to-occupy units in these areas are expected to offer attractive leasing terms to hike up their occupancy levels.
The Velaris Residences
For foreign buyers who are keen to capitalise on the tailwinds that are propelling Manila’s residential market, it can be complicated to assess the quality of property to invest in. A safe option would be to stick with established property developers.
Foremost among the established property developers in the Philippines are Hongkong Land and Robinsons Land. Their joint-venture company, RHK Land Corp, is developing a luxury residential condominium project called The Velaris Residences.
An artist’s impression of the luxury design and fittings for the apartments at The Velaris Residences. (Picture: Hongkong Land/Robinsons Land)
The development is in Bridgetowne, a 31ha mixed township and business park district located between Pasig City and Quezon City. Bridgetowne is also the first integrated township project by Robinsons Land, the real estate arm of Filipino conglomerate JG Summit.
The 457-unit Velaris Residences will enjoy direct access to major roads in Metro Manila such as Ortigas Avenue and Amang Rodrigues Avenue, while Bridgetowne is close to major commercial areas such as Ortigas Centre and Bonifacio Global City.
The project will have a 45-storey residential tower. It will offer one- to three-bedroom units of 495 to 1,678 sq ft; one- and two-bedroom terrace suite units of 780 to 1,318 sq ft; as well as four duplex four-bedroom penthouse suites of 3,190 to 3,480 sq ft. The apartments will have views of Quezon City and the Marikina River, Antipolo, Laguna de Bay, Alabang, and Bridgetowne Central Park.
The development will offer residents a full suite of luxury condo amenities including a multilevel landscape garden, a SkyClub, and fitness and wellness facilities such as an Olympic-length swimming pool and a Japanese-style onsen and lounge. The project will also support hybrid ways of working, with a dedicated workspace that is fitted with soundproof office pods and personal workstations.
The Velaris Residences will have a full suite of luxury amenities such as an Olympiclength swimming pool surrounded by cabanas. (Picture: Hongkong Land/Robinsons Land)
The Velaris Residences combines the strength and international credibility of Hongkong Land and Philippine real estate giant Robinsons Land. The credentials of both these developers provide investors and home buyers with peace of mind based on the track record of both developers, as well as enhance the potential for future capital appreciation of the development.
Condominium ownership
Foreign buyers can own condominium units in the Philippines under the government’s 60:40 rule, where developers are allowed to sell up to 40% of the available units in a condo to non-Filipinos. Foreigners are restricted from buying land in the Philippines.
To purchase a unit at The Velaris Residences, foreign buyers have to engage a broker who is an accredited seller of RHK Land, or a property specialist of RHK Land.
The Velaris Residences is projected to have condo dues of about PHP120 ($3) to PHP150 psm per month. As a guide, the developers say that based on current market trends, high-end condo units such as The Velaris Residences tend to attract rental leases of about PHP1,000 to PHP1,500 psm per month.
The developers add that high-end condo developments in the area tend to enjoy an annual capital appreciation of about 5% to 12%.
Both Cushman & Wakefield and Colliers noted that most of the upcoming pipeline supply of new homes have already been snapped up due to developer pre-sales, leaving only a handful of available units in a competitive market.
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