It wasn't all that long ago that Manila's central business district was glutted with empty office space, with vacancy rates reaching as high as 50% during the height of the 1997-98 Asian financial crisis. Resurgent corporate demand has now pushed that ratio down to 3.9% and is near capacity at 1.6% for so-called premium-grade space as of the last quarter of 2006.
Now some Manila-based property analysts believe that downtown demand will soon outpace supply, expectations that are raising rents across the entire commercial-property sector.
An article recently published quoted several property experts claiming "We expect rents to further increase by 20% over the course of 2007," and we see it no differently said Beth Collingz, International Marketing Director for PLC Global a condotel investment company in the Philippines specializing in the Lancaster Brand of Condo Hotels.
Premium-grade office capital values, meanwhile, were up 20% year on year by the end of 2006.
Manila's rental rates started their ascent in early 2005, when vacancy rates slipped below the 10% level in the central business district. Premium-segment rents rose by nearly 31% year on year in 2006, and in real terms rentals are now on par with the boom-time levels seen in early 1996. Meanwhile, rising demand for serviced residential apartments, retail space, hotels and even farm lots signal a broad-based recovery, some property analysts say.
Collingz said "This could be our biggest year, depending on the political developments in the next six months specially if the coming mid term elections are conducted well, the year 2007 could even be the biggest year for property developers considering the prevailing low interest rates."
The property recovery is being driven by three structural changes in the Philippine economy: improving fiscal and economic conditions, a rapid rise of US dollar remittances from overseas Filipino workers, and the sustained fast growth of the information-technology service industry.
Improved economic fundamentals, including steady 5-6% growth in gross domestic product since 2001, have helped push interest rates down to about 3%. That, in turn, is encouraging people to take their money out of low-interest rate-earning bank accounts and into what they hope are higher-yield property investments. Banks are even offering 25-year mortgages at fixed interest rates, enticing more middle-income earners to take the property plunge. "That's totally unheard of in the history of the country and our Condotel investment properties offering from 12%-16% rental returns per annum fit the bill” said Collingz.
As with most Philippine economic phenomena, overseas foreign workers are a driving force behind the current boom. Remittances by overseas workers have doubled over the past five years from $6 billion to about $14 billion, driven by the increasing globalization of the Philippine labor market.
Those global wages are in turn boosting the spending power of the local market. Last year 87% of our Condotel sales were accounted for by overseas Filipinos, up significantly from the 56% in 2005, and more than double the 26% seen in 2004. That's in large part because a growing number of professional and high-skilled Filipino workers are taking higher-paying jobs overseas but investing their earnings at home.
Changing demographics – the Baby Boomers - are also a factor in today’s market place. Overseas Filipinos who left in the 1960s and 1970s are coming back and looking at the possibility of retiring here. Others have started opening business operations in the Philippines.
Foreign Nationals are legally allowed to purchase as much as 40% of the total number of condominium units on the market at any given time. Overseas Filipinos and more and more foreigners are now emerging as a market for condotel units. Many or our clients are coming from different countries like South Korea, Australia, United Kingdom, Saudi Arabia and other parts of the Middle East," Collingz said.
PLC Global is the lead International Marketing Partners for Pacific Concord Properties, Inc., Flagship Lancaster Suites Condotel [Manila] development located along Shaw Boulevard, Mandaluyong City, Metro Manila, one of the hottest Condotel Investments in the Philippines.
To be called Lancaster Suites Manila Atrium Tower II [which is the second Tower adjacent to the existing “Sold Out” Tower I] we are now accepting Reservations for Studio, One, Two & Three Bedroom Suites adopting International Standard Escrow Trust Account “Buyer Safe” Easy Secure Payment Plans… with 6 year interest free payment terms or up to 12 year "In-House" financing available, full condo ownership, no management costs for Condotel Suites, no enrollment charges for joining the Condotel Rental Pool, and minimum monthly maintenance fees, as buyers or sellers of Real Estate you really should take a moment to look at this Philippine Condotel Investment Opportunity
To be completed and ready for turnover from December 2009, the Lancaster Suites Manila Atrium Tower II will provide unit owners with premier residential condo units with the option of enrolling their units in the Lancaster Condotel Rental Pool.
Great Investment for Fil-Am's whom visit Manila for Vacations or Business as they can earn Rental Incomes [at current purchase levels] of some 12-16% ROI per annum as Owner Non-Residents when not using their units through Condotel Management and reciprocal arrangement with Lancaster Cebu Resort Residences. This makes Lancaster Suites one of the Hottest Investment Opportunities in the Philippines.
All units at the Lancaster Suites have kitchen facilities. The standard unit price provides for the suite to be finished but not fully furnished. Included in the current price are the interior finishing’s such as tiled & fitted bathrooms, bedrooms with simulated wood plank flooring, living and dining area tiled floorings and lower kitchen cabinets/work tops installed. A complete optional extra interior fit-out package including appliances will be available towards the time the units are closer to being completed towards the latter part of 2009. Monthly condo dues are currently around 80 pesos/square meter of the unit floor area/month.
The Lancaster Atrium Suites are now available on the very affordable and competitive New Payment Plan that provides for Suites to be purchased on a No Interest No Down Payment basis with 67% of the payment payable over 60 equal consecutive monthly installments without interest and the 33% balance payable upon turnover of the unit or to be paid over an additional 5 years from turnover "In-House" Finance Plans.
All payments will be made to the Lancaster Suites Manila Atrium Tower A Equitable PCI Bank Escrow Trust Account. It is anticipated, given the track record on sales of Tower I Units that property appreciation for initial buyers of Tower A Atrium Units will be at least 60-70% on turnover of units.