BPO expat demand driving residential market despite supply concerns — JLL

EXPATRIATES are helping drive interest toward residential investment amid the continued expansion of the business process outsourcing industry, according to property consultancy Jones Lang LaSalle.

“Interest in residential investment is expected to increase steadily from expatriate employees as O&O ( offshoring and outsourcing) firms continue to expand operations in the Philippines,” JLL said in a report released on Thursday.

The vertical segment of the residential market is expected to continue growing “in the next few quarters” although the upcoming supply should keep prices from increasing, according to the report, titled “Persistent Growth Despite Large New Supply.”

From the current quarter toward 2020, about 140,000 housing units will become available in Metro Manila alone. The developments are concentrated in central business districts in Makati, Pasig and Taguig, among others.

“The substantial number of development launches in Metro Manila for the quarter is proof of the maintained pre-selling activity, although expected total launches for the year are expected to be lower than the past few years,” JLL said.

In third quarter, properties in the Bonifacio Global City and Makati Central Business District continued to fetch the highest selling prices in the National Capital Region.

In Bonifacio Global City, capital values ranged from P105,000 to P180,000 per square meter for mid- range development and from P145,000 to P188,000 for high- end developments.

In the Makati Central Business District, prices ranged from P105,000 to P154,0000 for mid-range developments and from P170,000 to P260,000 for high-end developments.

Monthly rents, meanwhile, ranged from P600 to P930 per square meter in Makati City, the same level registered in the preceding quarter. The range narrowed in Taguig City to P700-P1,000 from P680-P1,000.

“Demand for residential property remained healthy in the third quarter of 2016, primarily driven by economic activity, the sustained growth in over Filipino remittances and the continuous expansion of firms in the O&O sector,” JLL said.

By the end of 2017, the property consultancy expects about 1 million square meters of off ice space becoming available in the metropolis. The new supply has the potential to expand vacancy rates.

“Nonetheless, the office market is foreseen to favor landlords, as rents are expected to continue to increase on the back of continued office space demand from O&O firms,” JLL noted.

“Despite the depreciation of the Philippine peso versus the US dollar, O&O firms are likely to expand operations and demand more off ice space due to cheap labor pool and lower costs of putting up business in the Philippines.”