Manila among top Asian property investment spots
Cliff Harvey C. Venzon
BusinessWorld Online
10 january 2014
MANILA HAS emerged as one of Asia’s top real estate investment destinations for this year, according to a survey by Washington-based Urban Land Institute (ULI) and global financial services firm PricewaterhouseCoopers (PwC).
Cliff Harvey C. Venzon
BusinessWorld Online
10 january 2014
MANILA HAS emerged as one of Asia’s top real estate investment destinations for this year, according to a survey by Washington-based Urban Land Institute (ULI) and global financial services firm PricewaterhouseCoopers (PwC).
The Philippine capital placed fourth among 23 investment prospects in 2014, according to the Emerging Trends in Real Estate Asia Pacific report released on Thursday night. Manila ranked 12th last year.
"Manila has risen through the ranks this year, the result of a fast growing economy, increasing popularity of the city as a destination for multinationals seeking outsourced services (both business process outsourcing [BPO] and back office), and a growing awareness that the problems long associated with lack of transparency and governance issues have improved," the report stated.
The BPO industry’s head count grew by 21% to 776,794 in 2012, according to the Information Technology and Business Processing Association of the Philippines (IT-BPAP). That figure was expected to have grown by 20% last year, based on industry projections.
IT-BPAP, meanwhile, aims for revenues to reach $25 billion by 2016 with an estimated 1.3 million in labor force. Industry revenues reached $13.2 billion in 2012.
"The country also benefits from a young demographic, strong capital inflows from local citizens working overseas, and a workforce with a cultural affinity with the West," the report said.
According to the report, prime office rents are still well below pre-global financial crisis rates but are growing at 5-8% per year.
Office take-up hit 400,000 square meters last year, "with demand remaining high," it added.
The report also noted the constitutional restriction on land ownership.
"As with the other emerging markets, Manila can be a hard place in which to invest, partly because of laws that prevent foreigners from majority ownership of land and partly because there is already plenty of domestic liquidity," it said.
"Core product is therefore difficult to find, but on the opportunistic level a yield spread of 350 to 400 basis points can provide operating cash flow returns in the mid-teens," it added.
Meanwhile, Tokyo emerged as the top real estate investment destination for this year, displacing Jakarta, which slipped to third place after Shanghai.
Completing the list were Sydney, which placed fifth, Guangzhou (6th); Singapore (7th); Beijing (8th); Osaka (9th); Shenzhen (10th); Bangkok (11th); China’s secondary cities (12th); Melbourne (13th); Kuala Lumpur (14th); Seoul (15th); Taipei (16th); Auckland (17th); Hong Kong (18th); Ho Chi Minh (19th); Bangalore (20th); New Delhi (21st); Chennai (22nd) and Mumbai (23rd).
ULI and PwC researchers personally interviewed 120 individuals, while survey responses were received from 130 individuals who were affiliated in property, financial and investment companies.
The BPO industry’s head count grew by 21% to 776,794 in 2012, according to the Information Technology and Business Processing Association of the Philippines (IT-BPAP). That figure was expected to have grown by 20% last year, based on industry projections.
IT-BPAP, meanwhile, aims for revenues to reach $25 billion by 2016 with an estimated 1.3 million in labor force. Industry revenues reached $13.2 billion in 2012.
"The country also benefits from a young demographic, strong capital inflows from local citizens working overseas, and a workforce with a cultural affinity with the West," the report said.
According to the report, prime office rents are still well below pre-global financial crisis rates but are growing at 5-8% per year.
Office take-up hit 400,000 square meters last year, "with demand remaining high," it added.
The report also noted the constitutional restriction on land ownership.
"As with the other emerging markets, Manila can be a hard place in which to invest, partly because of laws that prevent foreigners from majority ownership of land and partly because there is already plenty of domestic liquidity," it said.
"Core product is therefore difficult to find, but on the opportunistic level a yield spread of 350 to 400 basis points can provide operating cash flow returns in the mid-teens," it added.
Meanwhile, Tokyo emerged as the top real estate investment destination for this year, displacing Jakarta, which slipped to third place after Shanghai.
Completing the list were Sydney, which placed fifth, Guangzhou (6th); Singapore (7th); Beijing (8th); Osaka (9th); Shenzhen (10th); Bangkok (11th); China’s secondary cities (12th); Melbourne (13th); Kuala Lumpur (14th); Seoul (15th); Taipei (16th); Auckland (17th); Hong Kong (18th); Ho Chi Minh (19th); Bangalore (20th); New Delhi (21st); Chennai (22nd) and Mumbai (23rd).
ULI and PwC researchers personally interviewed 120 individuals, while survey responses were received from 130 individuals who were affiliated in property, financial and investment companies.
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