Thanks largely to the business process outsourcing (BPO) industry, demand for office space in particular continues to grow, despite anxiety over the protectionist policy of US President Donald Trump, according to the first quarter 2017 report of Pinnacle Real Estate Consulting Services.

In the report entitled Go, Grow and Glow, Pinnacle also noted that the Philippine economy has been going from strength to strength, and will continue to grow.

It said that business decision to outsource service may be more efficient as compared to outsourcing manufacturing that may face additional tax backlash from the US federal government, noting that the consensus is that when US companies outsource the service component, Philippines remains to be on top of their list.

Pinnacle research and consulting director Jojo Salas said that demand for housing and residential products has not been adequately served due to the ever-increasing population. “Demand for commercial-retail and hotel has been underserved as well. Local and foreign manufacturers have been looking for suitable industrial spaces as well. With this kind of growth, a lot of companies will continue to glow to serve these various real estate demands,” he added.

Last year has been very good for the top real estate market players. Ayala Land’s consolidated revenues reached P124.6 billion, or 16 percent year-on-year, while net income went up 19 percent to P20.9 billion in 2016, due to the stable growth of its property development business, and the steady performance of its leasing portfolio, the report stated.

For 2017, the group intends to introduce P100 billion worth of fresh property inventory, 64 percent more than last year.

Another key market player, the SM Group, improved its operating income by 12 percent to P35.3 billion while consolidated revenues rose also by 12 percent to P79.8 billion.

The group ended 2016 with 60 shopping malls and plans to open four more this year. Also this year, the SM Group plans to launch 15, 000-18,000 residential units.

Meanwhile, the Megaworld Group grew its net income by 12 percent last year to P11.63 billion. The growth is attributed to stronger rental revenues that soared by 15 percent and the group’s efficient cost management in operations, Pinnacle noted.

Vista Land, another strong player, posted an 11 percent net income growth for the first nine months of 2016 while Robinsons Land improved its bottomline by 7.9 percent to P6.15 billion due to higher revenues from malls and offices as well as residential sales. Filinvest Land reported a net income growth of five percent to P5.35 billion, with biggest revenue growth coming from its leasing business.

Salas in his report said that there is no doubt that the top developers have been growing and are committed to expanding market coverage, adding that while all have been raking profits from sales especially residential products, they have been transitioning to ramping up their recurring income from rentals as well.

As for the different sectors of the real estate market, Pinnacle expects a growing trend for the office, retail and industry sectors, and a steady one for the residential and hotel and gaming sectors.

For the office sector, the report noted that demand by BPOs for office continues to be strong resulting in high occupancy levels and stable rents.

Pinnacle pointed out that the office market is still a landlord’s market and given the very high occupancy, rents have been increasing.

Meanwhile, demand for residential products has been steady, it said. Metro Manila fringe areas are now being explored to serve this demand, but delays in turning over new buildings continues due to shortage in skilled laborers. Pinnacle said that prices remain competitive although still slightly increasing, with investment buyers now testing the rental market.

Pinnacle estimates that there are a total of 210,000 units in Metro Manila as of the first quarter of 2017. About 44 percent of condominium developments are high end (over P7 million per unit), 37 percent middle mid-market, and 19 percent lower mid-market (less than P3 million per unit). With the approval of vertical socialized housing and the increase in the economic housing price ceiling to P1.7 million, it said that the lower mid-market and economic segments are expected to grow in the coming quarters.

As for the retail sector, it noted that the demand is stable from consumers who love malling and shopping, even as big players continue expanding.

Salas said that the big players will always maximize their competitive advantage to continue to shine in this high-growth real estate industry while small and medium size real estate developers have prospects of filling up clear gaps in the market, provided they do their due diligence and avoid competing directly with the big layers.

It will be a star-studded affairs as the Rotary Club of Manila holds its 13th Tourism Awards on June 8 at the New World Hotel in Makati.

According to RCM tourism awards committee, the awardees are being recognized for their significant support and contributions to the development and promotion of tourism in the country. They represent various sectors within tourism industry and are acknowledged leaders in their field.

The awardees are: for sustainable tourism, Dr. Mina Gabor, president of the International School; for transportation, Brian Cu, country head, Philippines, Grab; tourism personality award for Rotary International District 3810 Governor Roberto Pagdanganan; hotel category, Farid Schoucaire of New World Hotel Makati; integrated resort category, Andrew Tan, Megaworld Corp. chairman and CEO; airline category, PAL president Jaime Bautista; media, Joanne Rae Ramirez, Philippine STAR section editor and People Asiaeditor in chief.

Other awardees include Kim Jae-Shin, Ambassador of South Korea to the Philippines; US Ambassador Sung Kim; Japan Ambassador Kazuhide Ishikawa; Chinese Ambassador Zhao Jianhua; integrated resort hotel-gaming, Lawrence Ho, chairman and CEO, City of Dreams Manila; tourism and trade events category, Virginia Gaetos, assistant secretary, trade and investment promotion group; Tourism Secretary Wanda Teo for successfully organizing and staging of Ms. Universe 2016; Vigan City councilor Luis Singson; and a posthumous award for Jose Diaz Aspiras, the first tourism secretary under the Marcos administration who is recognized as the father of balikbayan and the Reunion for Peace Programs which are two of the most successful tourism programs of the Philippine government.

Source: http://www.philstar.com:8080/business/2017/06/04/1706362/still-bright-prospects