No slowdown in property demand this year, says JLL

MANILA, Philippines -  Demand for office and residential properties in the country is seen to remain strong this year as business process outsourcing (BPO) firms expand, and individuals see higher incomes on sustained positive economic conditions, real estate services firm Jones Lang LaSalle (JLL) said.

The entry of investors in agricultural and industrial sectors as well as in retail, is also seen to support strong demand for real estate.

Christopher Fossick, JLL managing director for Singapore and South East Asia said in a briefing that strong demand in the real estate sector is expected in the country this year with the growth in the economy seen to remain robust.

"Strong growth for economy means strong demand for infrastructure which includes real estate," he said.

"It is a rare occurrence for real estate to fall when economic growth is strong," he added.

On expectations that the economy will continue its positive performance, he said tremendous growth is also seen in the BPO sector.

As BPO firms look to expand, they will be in need of office spaces.

Fossick noted that for this year, a projected 18.7 percent increase in supply is seen to add to the current office stock in Manila.

He said demand for residential properties is likewise expected to be strong this year as the growth in the economy leads to higher incomes which would allow young working individuals to purchase their own home.

While traditionally, young working individuals stay with their parents until they get married, the increase in their purchasing power will lead them to buy their own residential properties.

He said JLL projects a 47.2 percent additional supply to the current residential stock in Manila.

"We expect significant supply in Manila but this does not mean it won't be taken up," he said.

JLL associate director Antonio Sabarre said most of the residential condominium projects which have been built and are being put up in Metro Manila are priced between P1.5 million to P3 million.

"These are the affordable ones for young professionals looking to move out," he said.

For her part, JLL associate director Lylah Fronda said the entry of international brands is also creating demand for retail spaces.

She noted that some malls have refurbishments and expansion plans underway.

"New malls and retail spaces are being created," she added citing the Century City Mall in Makati City and Fairview Terraces in Quezon City.

JLL country head David Leechiu also said that foreign firms coming to the country to invest in the agricultural and industrial sectors have likewise created demand for real estate.

"What we anticipated to happen in 2012 is happening. The Philippines is opening up to the global economy," he said.

"Companies are looking to investigate in the Philippines with the hope that in the next six months, they can commit to put capital to set-up a business," he said further.