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OFW remittances boost real estate industry

THE Real estate industry in the Philippines is on an uptrend path as overseas Filipino workers (OFW) remittances remain to be the largest contributor to its growth.

“OFW remittances were still the major player in the real estate,” said Karlo Pobre, Research Analyst of the Colliers International.

He added that in the first half of 2012, remittances contributed P1.8 billion to the Philippine economy.

Recent gross domestic product (GDP) figures showed that the country’s economy grew by 5.9 percent for the second quarter of 2012, while for the first semester, the growth was recorded at 6.1 percent

Besides remittances, business process outsourcing was also identified as one of the main drivers of the real estate growth in the country.

Meanwhile, among the market indicators in the Philippine real estate market, office, residential, hotel and leisure all posted positive figures, while industrial ended flat in the first half.

As for offices, Julius Guevara, associate director and department head of Colliers International, said that for the second quarter of 2012, vacancy in Makati marginally declined to 3.9 percent and is seen to stabilize at the sub 4-percent level at the end of the year.

He added that office rental rates consistently increased as landlords experienced strong pricing power, mainly because of limited office space.

Regarding the residential segment, Guevara noted that the large supply of studio and one-bedroom units, a segment most associated to Grade A and B buildings, has contributed to the relatively high level of vacancies in the previous year.

“Yet in the second quarter, overall vacancy rate in Makati was stable at 11 percent,” he added.

On the other hand, the Colliers International director noted that hotel and leisure is advancing in terms of occupancy rates and other factors.

“Occupancy rates are expected to exceed 70 percent level by the end of 2013, as the number of foreign arrivals is seen to grow by an additional 660,000 by the end of 2012,” he said.

In the industrial segment, Guevarra explained that it remained relatively flat because supply continues to remain passive, as developers are less poised toward expanding their industrial project portfolio.

Colliers International, a global real estate organization, is providing a full range of real estate services that focuses on property marketing, sales and leasing brokerage, real estate management, investment advisory, corporate solutions, valuation and consultancy/research services.

(Source: Manila Times)


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