PH is ‘most attractive’ location in Asia

Gross yields for property investments in the Philippines are the highest in Asia, making it the “most attractive” location for foreign investors in the region, according to property management and research firm Colliers International.

In the Q2 2017 Global Cap Rate Report released by Colliers International Valuation and Advisory Services (CIVAS) last week, office spaces in the country yielded the highest growth of 7.7 percent compared to Shanghai’s five percent, Tokyo’s 4.5 percent, Singapore’s four percent, and Hong Kong’s 3.8 percent.

On average, gross yields of office properties in Asia range from three to five percent.

In the residential front, the Philippines had the second highest yield in Asia at 5.5 percent, after Vietnam’s 5.7 percent. The country’s yield outpaced Tokyo’s 2.7 percent, Singapore’s 2.1 percent, and Hong Kong’s two percent.

These attractive yields, said Colliers, are enticing Japanese property firms to be more aggressive in investing in the local real estate sector.

Among the major Japanese real estate players that are expanding footprint in the country include Hankyu Realty Co., Ltd., Mitsui Fudosan, Nomura Real Estate Development Co., and Isetan Mitsukoshi.

“Local and Japanese companies mutually benefit from these joint venture projects,” said Ieyo de Guzman, Colliers International Philippines’ deputy managing director for investment services.

Partnerships

“While Japanese firms are enticed by high yields derived from Philippine projects, local developers gain by being vouched for by prominent Japanese brands known for their precision and high architectural and engineering standards.”

Hankyu Realty Co., Ltd. has teamed up with PA Alvarez Properties for the development of a P656-million affordable housing project consisting of 800 homes in Dasmariñas, Cavite. The Japanese company is also looking at developing residential projects in the Visayas and Mindanao.

Federal Land is partnering with Nomura Real Estate Development Co. Ltd. and Isetan Mitsukoshi Holdings Ltd. for the construction of a P20-billion retail and residential complex in Bonifacio Global City in Metro Manila.

In Cebu, a number of Japanese and Asian investors have also launched projects in the market. These include Lifecare Co. Ltd., which partnered Duros Land Properties, Inc., and HongKong Land, which has partnered with Taft Properties for Mandani Bay in Mandaue City.

“Over the near to medium term, we see the entry of more international developers given the Philippines’ rising status as a real estate investment hub in the region,” de Guzman said.

Over the near to medium term, we see the entry of more international developers given the Philippines’ rising status as a real estate investment hub in the region. IEYO DE GUZMAN COLLIERS PHILIPPINES DEPUTY MANAGING DIRECTOR FOR INVESTMENT SERVICES