The Philippine Real Estate Industry is a dynamic and robust sector that actively meets the demands of its expanding population thanks to a high density of visitors, an increasing number of expats, and several investment opportunities provided by the government. To operate efficiently in the Philippines, investors, business owners, and organizations will probably need to set up a headquarters or back-office location.
The Philippines' Real Estate Market
Over 126 billion was made in revenue by the real estate sector in the second quarter of 2021. The sector is one of the main engines of the Philippine economy due to its expanding middle-class population and constant remittances from overseas Filipino workers (OFWs).
Foreign businesses were able to continue investing in the Philippines' real estate sector thanks to the nation's ongoing attempts to make doing business here easier. Foreign direct investments (FDIs) are now responsible for approved real estate activities with a value of 507 million.
Commercial Real Estate Trends
The Philippine government has been aggressively looking for methods to strengthen its economy and bounce back from the disastrous COVID-19 pandemic's impact. To encourage and boost incoming FDIs in the country, policies like Build Build Build and numerous business-friendly legislation are regularly advocated.
According to a survey by Lamudi, the Philippines' need for commercial real estate has grown dramatically over time. The Metro Manila central business districts (CBDs), including Taguig, Makati, Pasig, and Quezon City, are becoming some of the most sought-after areas for commercial real estate nationwide.
Beyond the metro, regional hubs like Davao City and Cagayan De Oro in Mindanao, Pampanga in Luzon, and Cebu City in Visayas are all considered to be important places for commercial real estate investments.
Despite COVID-19, many organizations are looking for ways to expand the adoption of a hybrid work environment that offers secure workspaces for companies and individuals who need offices or headquarters to run their businesses.
Top Buyer: IT-Business Process Outsourcing (BPO) Sector
In 2022, it is anticipated that the Philippines' IT-BPO industry will boost its real estate investment. Considered as one of the top outsourcing centers in the world, the nation's BPO industry represents 15% of the worldwide BPO market.
The sector was able to acquire an increasing amount of real estate to accommodate their business operations and provide workspace for its internal staff thanks to the influx of FDIs. The Philippine Economic Zone Authority (PEZA) reports that international investors have increased their promises for IT-BPO management by 37%.
The leasing of condos and other properties is expected to increase in the next 18 months as the business continues to grow, according to PEZA, despite the ongoing COVID-19 pandemic.
Growing Interest in Co-Working Environments
Utilizing co-working spaces for meetings, projects, and even corporate operations has been increasingly popular in the Philippines in recent years. Many businesses are choosing to rent co-working spaces in addition to their current headquarters due to their flexible and more affordable possibilities.
In the next three years, flexible workspaces are expected to grow by 10%, according to Colliers Philippines. These areas enable businesses to offer a more intimate choice for workers as social estrangement and workplace limitations emerge as a result of COVID-19.
This makes it possible for freelancers, independent contractors, and other remote workers to collaborate in a group context, offering a more effective and work-life balance-friendly option.
FDIs Supporting Commercial Real Estate Growth
A total of 36 billion pesos worth of foreign investments entered the Philippines in 2021 from a number of different nations. The United States (US), Taiwan, and Japan, among other nations, have pledged investments of about $13 billion, $4.4 billion, and $4.3 billion, respectively, according to the Philippine Statistics Authority (PSA).
Additionally, it is anticipated that the amount of approved FDIs will lead to the creation of around 24,000 employment, increasing the need for workplaces to support the industrial and commercial requirements of businesses operating in the Philippines.
Residential Real Estate Trends
With the country's population continuing to rise, the residential real estate market in the Philippines is also seeing an increase in investments.
Impact of OFWs' Residential Real Estate Investments
One of the largest beneficiaries of international remittances worldwide is the Philippines. Overseas Filipino Workers (OFWs) sent over US$2.6 billion in remittances in August 2021, up 5.1% from the same month the year before.
OFWs are able to invest in a variety of residential areas all across the Philippines thanks to their high purchasing power. After their contracts expire or upon retirement, the majority of OFWs return home. In a 2019 survey of 10,000 OFWs, more than 80% said they planned to buy a home in the Philippines over the following 12 months.
A variety of residential properties are offered by several developers, ranging from upscale villages to reasonably priced mid-range townhouses, making it possible for OFWs to locate their ideal home or to provide housing for their family members in the Philippines.
Green Spaces Are Growing
Property developers and the related local government units (LGU) in the Philippines are focusing on constructing more green areas in addition to building residential and commercial structures.
Using green technology throughout the development and building of the properties as well as its post-development upkeep, office and residential spaces in Metro Manila are predicted to become more environmentally friendly and sustainable. Around 37% of Metro Manila's buildings between 2021 and 2023 are predicted by Colliers Philippines to get wellness certification.
Microcities' Development
A city enclosed by a city — a microcity is a collection of residential and commercial structures that are grouped together in one area and are intended to house facilities like shops, malls, gyms, and salons. Modern amenities and requirements for the twenty-first century are built into the design of these complexes.
Such construction is intended for the growing number of millennials who are moving into residential areas that meet their needs. The Cebu IT Park in Cebu City is a prime example of an existing microcity that best exemplifies the features of microcities in the Philippines.
Investing in the Philippine Real Estate Market
The Philippines is a great investment destination for international business owners who want to create a presence in the nation and expand their market share in the Asia-Pacific region because to its advantageous geographic location, large consumer market, and rapidly expanding economy.
With that, PropertyAccess makes it easier for local and international investors to invest in Philippine properties. With various developer partners, transactions are guaranteed to be legitimate and seamless. Consider investing in property and diversify your investment portfolio as early as today.