Emerging-markets interest expected to boost property
THE REAL estate industry is poised to benefit from the government’s plant to improve the business climate amid a global economic slowdown that renewed investor interest in emerging markets, according to consultancy KMC Savills, Inc.
In a media roundtable discussion in Makati City on Wednesday, the real estate services firm cited positive prospects for the economy under President Rodrigo R. Duterte as among the drivers of the property industry’s growth.
“The economic agenda for the country prioritizes countryside development, infrastructure and agriculture growth, and increased government spending,” KMC Savills Cofounder and Managing Director Michael McCullough said in a statement distributed during the media briefing.
“Pair this with the administration’s goal of positioning the Philippines as one of the top three destinations in Southeast Asia for FDI ( foreign direct investment) inflows by 2022, and we see a very positive outlook for the real estate industry,” Mr. McCullogh added.
KMC Savills Head of Research Antton Nordberg noted, in particular, that “exceptional” yields from the office segment have attracted foreign investors into the Philippines.
“The Philippine market is offering exceptional yields right now compared to the rest of the region and even other markets in the world,” Mr. Nordberg said, with the Philippines offering yields around 7.5% next to around 9-10% in Vietnam.
Also, the local industry has benefited from the economic slowdown and uncertainty prevailing across the world. The Philippines has become an option for businesses looking for cost-effective locations, Mr. Nordberg said.
The uncertainty brought by “Brexit” — the United Kingdom’s decision to leave the European Union — in a particular, could prompt multinational companies and foreign investors to relocate certain operations or investments.—