By Madelaine B. Miraflor
Metro Manila, even as congested as it may seem, still has a room to grow and is even believed to have been rapidly rising as a megacity, at least for real estate service provider Santos Knight Frank.
During a briefing on Wednesday, officials at Santos Knight Frank projected a highly optimistic future for Metro Manila amid strong investor confidence and sound macroeconomic fundamentals in the Philippines.
All of this, according to Santos Knight Frank chairman and chief executive officer Rick Santos, will be powered by a growing pool of high-value talent, real estate expansion and a robust consumption-driven economy.
“Manila today is the Hong Kong and Singapore of 30 years ago. The level of development in the metropolis over the last decade has been unprecedented and reflects on the accelerated expansion of the property market. Manila has since become an important hub for industries such as IT-BPO with huge opportunities of growth for other sectors,” Santos told reporters.
With a population of more than 25 million people, the Greater Manila Area has more people than Hong Kong and Singapore combined. Its demographic is a high-value asset in industries such as IT-BPO, where Metro Manila ranks as fourth in the world based on the 2017 Tholons Services Globalization (Outsourcing) Index.
A fast-growing metropolis, Metro Manila’s property market also remains robust vis-à-vis several Asian cities.
Santos said that prime office rents grew between 5 percent to 6 percent annually from 2011. Most recently, prime office rents in Metro Manila increased by 3.4 percent year-on-year during the second quarter of 2017, outperforming Tokyo (3.2 percent), Taipei (2.8 percent), Beijing (-1.9 percent), Shanghai (-2.0 percent), Singapore (-5.1 percent), and Jakarta (-8.3 percent).
At the same time, Metro Manila likewise experienced one of the lowest vacancy rates (3.4 percent) across Asia Pacific during 2Q 2017.
“On a regional basis, the performance and fundamentals of the Manila office market look solid. While some of the other Southeast Asian markets are seeing demand remain sluggish and the major Chinese cities are seeing huge amounts of new supply, the Manila market has one of the tightest vacancy rates in the region and looks set for a strong 2018,” said Nicholas Holt, Asia Pacific Head of Research, Knight Frank.
With a growing number of companies venturing onto the global stage, Metro Manila continues to see diversified demand, not only in the office market, but also in the residential sector, where investors from Southeast Asia, China and the Middle East are putting more capital into the Philippines.
Meanwhile, Santos pointed out that infrastructure remains to be a critical aspect in keeping Metro Manila on track.
The government has particularly lined up 64 major infrastructure projects in the Philippines, several of which are underway in Metro Manila such as the NLEX-SLEX Connector Road, NAIA Expressway Phase 2 and NLEX Harbor Link.
To decongest the metropolis and encourage development in the outskirts, important mass transport projects such as Mega Manila Subway, Manila-Clark Railway and expansion of the Light Rail Train are also in the pipeline.
In the meantime, with limited supply of land in the city core, new districts have also emerged in the outskirts of Metro Manila.
“The next wave of expansion is happening in emerging areas such as Alabang, Nuvali, Bulacan and Clark. It is crucial that infrastructure is in place to provide efficient connectivity between various parts of this growing city,” Santos further said.