Property market unperturbed by martial law in Mindanao

MANILA, Philippines -  The Philippine property market is not seen to be negatively impacted by the martial law declaration in Mindanao, as foreign companies continue to express interest in the robust BPO sector,according to a property services firm.

In a media briefing yesterday, Santos Knight Frank chairman and chief executive officer Rick Santos described the implementation of martial law in Mindanao as a temporary measure to take out some of the lawlessness.

“Demand to continue in the IT-BPO sector despite what’s happening in Mindanao. So it’s business as usual,” Santos said. “So the business community is viewing it practically. Business will continue after this temporary measure.”

Santos said the country remains as the most attractive inbound investment destination in the region for IT-BPO companies, driven by the Philippines’ favorable demographics, strong dollar, competitive labor cost and continuous infrastructure development.

“We expect the IT-BPO sector to sustain its upward trajectory especially as the government paves more growth opportunities in areas such as Clark, Cebu and Iloilo through an aggressive infrastructure program,” Santos said.

The company official cited the results of the 2017 ASEAN Business Outlook Survey, which showed that investors are enthusiastic of the country’s growth, compared to its ASEAN neighbors, driven by the government’s Build Build Build platform.

Based on the survey, the Philippines registered the highest satisfaction sentiment with 77 percent, followed by Vietnam with 72 percent and Myanmar with 70 percent.

Santos Knight Frank senior director for landlord representation John Corpus said it is the Filipino workforce that is attractive about the Philippines, apart from the lower rental rates it offers.

“Aside from the rent, of course, the flexibility of our people, our proficiency in terms of English, the cheap labor cost has been the main driver of our country,” Corpus said.

“We see opportunities for expansion from different countries, new markets such as Israel, Qatar, Russia, China, UK. These are the growth markets,” added Corpus.

Moreover, apart from the demand for BPO office spaces, the real estate services firm noted growing foreign interest for high-end and luxury residential properties in the country.

“The luxury and high-end residential market continues to reap the benefits of the country’s sound and sustained macroeconomic fundamentals as investment buying activities become more prominent,” the company said.

Santos said demand is coming from investors from countries such as China, Japan, South Korea, Singapore, Indonesia, Hong Kong and Malaysia.

At present, 77 percent of the 34,143 high-end residential units in the market have already been sold, while 86 percent of the 3,290 luxury residential units have been absorbed by the market.

Indicative selling price of high-end residential units currently ranges from P120,000 to P185,000 per square, while average selling prices for luxury residential units from P180,000 to P350,000 per square meter.