Can tourism-focused real estate help the Philippine property market rebound?

It feels a bit odd talking about tourism-focused real estate when most visitors are unable to travel to the Philippines at the moment. However, it can be an important driver of a Philippine property market rebound once the situation returns to normal.

Philippine Department of Tourism (DOT) data showed there were 8.26 million foreign arrivals in 2019, more than a 15 percent increase from the previous year. That number is dwarfed by the country’s regional peers. In 2019, Indonesia recorded roughly 16 million international arrivals, Malaysia welcomed more than 26 million tourists, Vietnam received an estimated 19 million visitors and Thailand surpassed 40 million arrivals.

So, what gives?

It has nothing to do with a lack of interesting destinations. Tourists who visit the Philippines almost always praise the country’s warm hospitality and beautiful scenery. Arrival numbers elsewhere in Southeast Asia are buoyed by inter-region travel, something not seen in the Philippines due to its isolated location.

But this isn’t really a huge issue, especially as it relates to tourism-focused real estate. Apart from some demand from Singapore, there isn’t a lot of intra-regional property buying. The bulk of tourist arrivals to the Philippines in 2019 came from China, South Korea, USA, Japan, and Australia.

Tapping into the retirement market could also benefit the country. The Philippines has one of the best retirement visas available in Southeast Asia. This could help it attract more long-stay visitors.

On the domestic front, an additional 60 million trips are made by locals each year, an important figure to note. This means there is a large base of both international and domestic property buyers who will likely return to the country’s popular tourist destinations once the COVID-19 situation has improved.

Being ready to tap into this market and deliver tourism-focused real estate could be a catalyst in a Philippine property market rebound. Of course, it is also much easier said than done.

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Why does the Philippines need to develop tourism-focused real estate?

What’s holding the Philippines back?

According to the Philippine Statistics Authority (PSA), tourism accounted for 12.7 percent of the country’s GDP in 2019, up from 5.6 percent in 2000. Both government and private sector investment in the tourism sector has grown as well.

The PSA found that private investment rose by an average of 19.3 percent annually between 2010 and 2019. Government investment in tourism infrastructure and other related fields increased by 4.6 percent on average from 2012 to 2019.

This is good, but not nearly enough. While tourism infrastructure has improved in some parts of the Philippines, such as Cebu and Puerto Princesa, more work is needed to make the country a viable destination for real estate investors.

Apart from improving infrastructure, developers must be more in tune with the needs of tourism-focused real estate buyers. There are a few companies getting it right (we will get to those a little later in the article) but too many firms aren’t being innovative when launching new projects in tourist destinations.

Looking at tourism-focused real estate success in Southeast Asia

Developers in the Philippines don’t have to look far to find tourism-focused real estate success stories. Bali has been attracting foreign property investors for decades in spite of complex laws that prevent freehold ownership. Having a first mover advantage has helped the island with homebuilders and agents now boast decades of experience in helping property buyers.

In Thailand, the rise of the condotel helped attract a new wave of property buyers who can enjoy the best of both worlds–investment returns and a holiday home. If you are unfamiliar with the condotel concept, it is a project sold similar to a pre-selling condominium but operated like a hotel.

The main difference between most condotels in the Philippines and ones in Thailand’s tourist areas is management. Thai homebuilders are partnering with well-known, 4- and 5-star hotel brands to manage their condotels. These are more attractive to buyers since they trust the brand and are more popular with guests ensuring strong rental returns. In the Philippines, many developers try to manage the property themselves which can be off-putting to potential investors.

Tourism-focused real estate in Vietnam has taken off during the past five years despite foreign buyers being unable to access this market. Driven entirely by domestic demand, developers here have been able to take advantage of the country’s rapidly growing tourism sector. Similar to Thailand, most projects are condotels or other properties that provide on-site management for investors.

If tourism-focused real estate in the Philippines is going to grow, developers need to understand what property seekers are after. Most require a hands-free investment being operated by a hotel brand they trust. They also like having the option to stay at the property for a week or two every year. This is something a handful of real estate developers in the Philippines have adapted to.

Early movers

Grand Land tourism-focused real estate
Grand Land is leading the tourism-focused real estate efforts in Cebu

While there hasn’t been a lot of activity when it comes to tourism-focused real estate in the Philippines, a few developers have recognized the potential of the sector. In Cebu, Grand Land has been at the forefront. The Grand Tower, a mixed-use project containing the Dusit Princess Cebu, was one of the region’s first condotels targeting users/investors.

The project will be operated as a hotel with unit owners sharing net room revenue. Additionally, they are entitled to stay at the property 15 days each year. Dusit Princess Cebu proved to be popular among both local and international investors which saw it quickly sell out. Construction is ongoing and the development remains on schedule.

The Chancellor Hotel from Global-Estate Resorts, Inc, a subsidiary of Megaworld, is another tourism-focused real estate project making waves in the country. Located in Boracay, this condotel is perhaps the most ambitious to date. It allows property buyers a chance to invest in one of the country’s most popular destinations.

Can tourism-focused real estate help the Philippine property market rebound?

It’s important not to get carried away about what type of impact this can have. Tourism-focused real estate can help the Philippine property market rebound, but it is only one part of a larger equation.

Ultimately, this sector serves as a link between the property and tourism industries that can elevate both. Tourism-focused real estate in the Philippines won’t single-handily turn things around. However, it could help the Philippine property market reach new heights once the current situation has passed.

Developers may think demand isn’t there, but this seems like a miscalculation. Overseas buyers are already active in places like Cebu, but there are many more on the sidelines waiting for condotel projects that provide a hands-free form of investment.

There is likely to be greater demand for tourism-focused real estate from both domestic buyers and OFWs. That is because it ticks a lot of boxes in terms of what they are looking for. The potential for returns is good, there is no need to worry about management and it doubles as a holiday property.

That being said, it is necessary to mention the risk which we are living through now. Another global pandemic would harm tourism-focused real estate more than traditional properties. Both developers and investors will be keenly aware of that.

If you look at some of Southeast Asia’s other tourism destinations, you’ll see the property markets bounced back here faster than urban locations. Both Bali and Phuket have overcome catastrophic events to maintain their upward momentum.

At the very least, it won’t hurt the property sector to consider tourism-focused real estate moving forward. As we have seen elsewhere in the world, doing so may benefit everyone.

lifted from: DOT PROPERTY

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Residential demand in Cebu is likely to pick up this year

Residential demand in Cebu is expected to increase this year with lower real estate prices and key infrastructure projects driving the market forward. The city has been the preferred investment destination outside of Metro Manila and that trend will continue in 2021.

“Colliers projects a potential rebound in residential demand in 2021 (in Cebu) and thus sees a faster pace of price increase from 2021 to 2022 to reflect a stronger residential market,” Joey Bondoc, Colliers Philippines Senior Research Manager explained to the Philippine News Agency.

He continued, “The residential sector of the area is at a discount as compared to projects located within the country’s capital. The proliferation of both local and national developers in Cebu has raised land and property values.”

Research from Colliers Philippines found that new project launches and take up both fell in 2020 due to the COVID-19 pandemic. However, the consultancy believes both will recover this year on the back of strong residential demand in Cebu.

What’s driving residential demand in Cebu?

Two key factors have been responsible for driving residential demand in Cebu over the past ten years. Firstly, home prices are significantly less than those in Metro Manila which is appealing to buyers. Secondly, a number of infrastructure projects will improve the region’s connectivity and boost property prices in the future.

“Over the past few years, we have observed the transformation of Cebu’s skyline with large-scale residential, commercial, retail and hotel developments. The property boom in Cebu offers an alternative metropolitan-paced business lifestyle at a discount to Metro Manila,” Bondoc stated.

Several key infrastructure projects remain in the pipeline and these could support the growth of the Cebu and Davao property markets. In Cebu, the Cebu-Cordova expressway, Cebu bus rapid transit, Cebu monorail, and Metro Cebu expressway are a few of the possible improvements.

(c) https://www.dotproperty.com.ph/blog/residential-demand-in-cebu-likely-pick-year

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Cebu Landmasters’ Mandtra Residences sold at 60% in 3 weeks

LEADING Visayas-Mindanao developer Cebu Landmasters, through joint venture firm Cebu Homegrown Developers, Inc., launched its latest condominium project with premium amenities in Mandaue City, Cebu aimed at meeting the housing needs of a surging segment of upwardly mobile professionals and entrepreneurs in the region.

The P3-billion development Mandtra Residences is managed and developed by CLI and offers condo units from 21 sqm. to 41 sqm. ranging from P2.35 million to P4.17 million. It began pre-selling its first tower in March and was close to 60 percent sold after three weeks.

Jose Soberano III, president, and CEO of CLI, remarked: “We want to strengthen our leadership in our home base and this joint venture enables us to have access to high-value locations that allow us to offer a new generation of Cebuano entrepreneurs and professionals seeking upgraded living spaces. Our exceptional sales velocity indicates we are indeed meeting a highly felt need.”

With construction already underway, Mandtra Residences is a three-tower development on a landscaped 12,405 sqm property with a lush tropical theme. A retail podium, a sky garden, clubhouse with adult and kiddie pools, jogging paths, fitness gym, and chapel have been designed to provide homeowners a multi-faceted urban sanctuary. According to CLI executives, planning for this project took place at the height of the 2020 pandemic, so the design placed a premium on healthy living and balanced well-being with its generous array of amenities and lush open spaces.

The first tower with a lobby and three passenger elevators has 26 floors with 595 units ranging from studios to one-bedroom units with selected units of both sizes offering balconies. Moreover, several units have been designed so partitions and walls can easily be knocked down and spaces combined. The first tower is set for completion in 2025.

Mandtra Residences will be the first in a planned series of projects from Cebu Homegrown Developers Inc. Soberano concluded: “Our partnership believes in the innate dynamism and abilities of Cebuano entrepreneurs and professionals and hope to meet their aspirations beginning with well-planned residential communities.” (PR)

Lifted from SunStar and all credits are theirs alone: https://www.sunstar.com.ph/article/1890003?fbclid=IwAR0MYHsU83g_oy-zRQUaTsahN1f7v0PA2eFnZ9c5KL7JbczEALWSla2_Yjs

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Cebu City among top cities for online property seekers — Lamudi

By: Morexette Marie B. Erram of Cebu Daily Nes February 09,2020 – 02:40 PM

Read more: https://cebudailynews.inquirer.net/287005/cebu-city-among-top-cities-for-online-property-seekers-in-2019-lamudi#ixzz6PrZNzByu

cebu city top city to invest in
Metro Cebu skyline. | CDN Digital file photo

CEBU CITY, Philippines — Cebu City is among the top cities preferred by online Filipino property seekers for the year 2019.

Lamudi, one of the world’s leading digital real estate portal, revealed this in their Real Estate Market Review 2019 published on January 16, 2020.

“2019 was a strong year for the real estate sector. Major cities all over the Philippines have shown interesting performance, and this has led to more opportunities in the office, residential, and retail sectors nationwide,” said Lamudi.

Cebu City ranked fourth in their Top 5 most popular cities for 2019, next to Makati City. It’s the only city outside Metro Manila which made it to the list.

“Cebu City is one to watch, as residents from this city account for 87.56 percent of page views generated in Visayas,” the report added.

Quezon City topped the list, which was followed by Makati City at 2nd, Manila City at 3rd, and Taguig City at 5th.

Lamudi cited high influx of tourists coming to Cebu City as one of the factors, as well as the demand for office spaces brought by Business Process Outsourcing (BPO) companies.

“The high influx of tourists coming to Cebu City has also propelled a higher demand for condominiums in the area,” it stated.

For the first 11 months of 2019, the Department of Tourism (DOT) announced that Cebu is the second most preferred tourist destination for foreign visitors, next to Boracay Island. DOT recorded 1.4 million arrivals for Cebu.

Quoting findings from Colliers International Philippines’ Cebu Property Market Report, Lamudi said the growth of BPO industries fueled the island’s economy, and ‘encouraged investments for the development of more office spaces’.

“Investments in Cebu’s BPO and IT-related industries have also fueled the demand for horizontal and vertical residential developments,” they said.

Meanwhile, Lamudi also revealed that millennials, who make up 43.98 percent of pageviews for properties listed in Visayas, are also looking for job opportunities in the region, as well as potential property ownership, due to Cebu City’s continued economic growth.

Aside from Cebu City, Lamudi said cities outside the National Capital Region showing strong interest in real estate properties are Bacoor, Davao, Angeles, and Antipolo.

With 39.24 percent of total leads in Lamudi’s website, the report showed that condominium was the most popular property type listed in Lamudi for 2019 — both for sale and rent.

“Condominiums may be utilized as one’s primary residence or as a rental investment. With the increasing demand for condominium units in metropolitan areas, it is advisable to buy during the pre-selling period as the property value of condominiums increases near the development’s completion,” Lamudi added.

It also revealed that more property seekers are opting to buy real estate than renting them.

“Property seekers on Lamudi are more interested in buying (60.59 percent) than renting (39.41 percent), with their budget able to accommodate for-sale properties up to P20 million or for-rent properties up to P1 million. In the more affordable segment, the majority of seekers look into the P5,000 up to P15,000 price range,” Lamudi said.

Meanwhile, Dubai in the United Arab Emirates (UAE) hosted the most number of property seekers showing interest on the Philippines’ real estate industry.

“One explanation for the sustained growth from Dubai, which was also the top overseas city in 2018, can be attributed to OFWs (Overseas Filipino Workers) wanting to buy their own property to settle in once they get back to the Philippines,” said Lamudi./dbs

Read more: https://cebudailynews.inquirer.net/287005/cebu-city-among-top-cities-for-online-property-seekers-in-2019-lamudi#ixzz6PraJUhD9

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