Short-term leases give developers a window
The abundant supply of condominiums in the country should encourage developers to offer units under short-term leases, said Colliers International in a report yesterday.
Tourism and the proximity of most condominium projects to the business districts would provide developers with a large inventory of ready for occupancy (RFO) units, another income opportunity.
“Over the past three to five years, a number of developers have been very aggressive in launching studio and one-bedroom units,” said the property management firm. In Metro Manila, 70 percent of condominium stock are studio or one-bedroom dwellings.
Colliers believes that “leasing out these units either individually or even as shared units makes sense, as long as the leasing schemes do not go against the market positioning of the properties and do not lead to a deterioration of the projects’ perceived value.”
First, tourism prospects appear supportive of short-term leases. In addition, millennials, who compose about 40 percent of the workforce and are heavy users of “shared economy” services like AirBnB, will find short-term lease arrangements advantageous to them.
“As developers try to corner a larger fraction of the rental housing pie, they must ensure that their developments have amenities similar to condominium developments in the central business districts. Since the target occupants are millennials, Colliers proposes that firms apportion amenities and facilities such as gyms, retail shops and lounges with fast broadband internet connection,” the report said.
Helping workers avoid traffic
Meanwhile, worker accommodation projects are also seen as being sustainable over the medium term, given the growing number of highly-mobile young urban professionals who cannot afford to own their own apartment yet or rent a condominium unit within business districts.
As traffic continues to worsen in the country’s key cities, worker accommodation projects are also seen as a practical option.
The Sy-led conglomerate, according to Colliers, has indicated its interest in housing rental, with SM Investments Corp.’s acquiring a 61-percent stake in Philippines Urban Living Solutions, Inc. (PULS), the operator of “MyTown” dormitory buildings.
Andrew Tan-led Megaworld is also seeing a growing interest in RFO units. In a previous interview, Megaworld Prime RFO vice president for sales and marketing Donna V. Racho said the developer is allocating five percent of its total condominium units for RFO buyers. In Cebu, Megaworld launched in September last year its RFO inventory inside its township project in the 8 Newtown Boulevard at The Mactan Newtown in Lapu-Lapu City.