Luxury developments seen to increase as demand rises

CEBU, Philippines — From the robust performance of economic residential properties even during pandemic, luxury developments are expected to be launched starting this year as demand rises.

According to Colliers Philippines, the country’s real estate sector may expect more joint ventures between local and foreign developments in building super high end property developments including residential projects.

“We believe that projects in the luxury segment2 are the least-affected during an economic slowdown,” said experts at Colliers Philippines.

The globally known property market intelligence firm urged developers to look for good JV (joint venture) deals with foreign capitalists in build ultra-luxurious developments in different areas in the country.

Despite the higher price, the average take-up in these luxury projects reached 85 percent as of the end of 2020.

Colliers believes that Philippine developers should seize opportunities in the market by further exploring partnerships with foreign firms.

Given the potential demand, “we expect more luxury projects to be launched in the market, and these are likely to include joint venture developments.”

At present, JV projects between local and foreign firms are currently among the most expensive in the market and offer innovative facilities and amenities.

Meanwhile, according to the recently released survey result conducted by real estate services and consultancy firm JLL, over 70 percent of investors surveyed in Asia Pacific, want to increase hotel sector exposure in 2021.

Asia Pacific capitalists are bullish of the hotel market in the region and are interested in deploying capital into the sector starting 2021.

JLL is forecasting approximately US$7 billion in transactions in 2021, an increase of 20 percent year-on-year, up from US&5.8 billion in 2020.

While sizable pools capital are ready to be deployed, pricing and financing will become a larger consideration for investors.