Manila (Philippine Daily Inquirer/ANN) - Once a laggard in the region, Manila is rising to be one of Asia-Pacific's most appealing property markets amid escalating concerns over high property prices in China's core markets.
Based on a research published by Urban Land Institute and PwC "Emerging Trends in Real Estate 2013," Manila ranked 12th out of 22 regional markets ranked in terms of investment prospects and ninth in terms of development prospects, marking a rapid rise from near the bottom of the rankings in previous years' polls.
Manila was ranked 18th in the outlook for 2012 and 20th two years before that. This is the 7th edition of the trends and forecasts publication, which is based on the opinions of more than 400 internationally renowned real estate professionals, investors and other stakeholders.
Colin Galloway, principal author of the report, said in a presentation Thursday night that he was surprised that the Philippine did not rank even higher given the number of positive updates from this market. But he said as it would usually take time for all recent developments to be digested by the market, next year's edition would likely show even more favourable results, even catapulting the Philippines to a leading position.
Manila has fared well in specific property segments, specially in the secondary or rental apartment residential segment where it ranked second to Jakarta. The ranking was based on the percentage of "buy" recommendations of survey respondents as opposed to "hold" or "sell." Jakarta had a "buy" rating from 43.62 per cent of respondents while Manila had 36.46 per cent. The residential rental segment was where Manila got its best rating in the report although it also ranked high in office (6th) and hotel (8th) property segments.
Jakarta was named by the report as the top property market in terms of investment prospects. Other cities that ranked higher than Manila were Shanghai (2nd), Singapore (3rd), Sydney (4th), Kuala Lumpur (5th), Bangkok (6th), Beijing (7th), China secondary cities (8th), Taipei (9th), Melbourne (10th) and Hong Kong (11th).
On the other hand, the cities edged out by Manila in terms of investment prospects were Tokyo, Seoul, Guangzhou, Shenzhen, Auckland, Ho Chi Minh, Bangalore, Mumbai, New Delhi and Osaka.
"Markets in Manila have performed well in the past couple of years as a result of the growing economy, a transparent and business-friendly government and the country's ongoing success-an eye-opener-in attracting foreign corporate clients to its business process outsourcing (BPO) facilities," the report said.
"Bureaucracy has declined and transparency has improved considerably over the past few years. As a result, Manila's appeal as an investment destination climbed from the near-bottom of the rankings in previous years' polls," it said.
The report also noted that a large casino development has provided impetus to property development and was expected to boost tourist arrivals when completed in phases over coming years.
But while investment prospects appeared bright, the report also noted that government regulations that bar foreigners from holding majority landownership continued to deter international investment.
"What is more, local developers have little incentive to partner with foreigners given the availability of ample liquidity from domestic sources. Foreign opportunities, therefore, are likely to remain restricted to the gaming and BPO sectors. Admittedly, both present large opportunities, with the latter currently accounting for some 70 per cent of new office take-up in Manila," the report said.
Judith Lopez, chair and senior partner at Isla Lipana & Co., PwC member firm, commented: "Manila is in the midst of a property boom. It's the best that we've seen in decades-clearly a sign of the increasing confidence in our economy."