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Property Market Sustaining Growth In 2012 Driven By BPO Industry

MANILA, Philippines — The domestic property market would sustain its growth in 2012, driven by a strong demand from the business process outsourcing (BPO) industry particularly the office and residential sectors in the metropolis.
Rick Santos, Chairman and Managing Director of CBRE Philippines, is bullish on the Philippine property market with more development opportunities as more foreign investors are expected toinvest in outsourcing and real estate business this year.

“Institutional capital flow would follow the institutional outsourcing companies and develop an institutional investment market as investors are in search for returns,” says Santos.Santos said the Euro debt crisis and the slowdown of the US economy would not affect the domestic property market. “The Philippine real estate market, driven by outsourcing, moves counter-cyclical against the European and US markets,” says Santos.

The dollar remittances from the overseas Filipino workers (OFWs), the positive outlook of the Philippine economy and low interest rates would continue to benefit the residential and office markets and the mortgage sector.

CBRE, a leading real estate services and advisory firm, expects property developers to
continuously expand their portfolios as several of these firms would issue initial public offerings (IPOs) and secondary offerings to actively pursue residential projects.

A total of 105,722 units are expected to be completed this year, while at least 14,112 residential condominium units would enter the market.

In 2011, the condominium sector posted a 29 percent increase to 57,979 units completed, reflecting a strong demand in the residential sector.

CBRE attributed the growth to the real estate developers’ confidence on the residential market especially in the mid-income sector.
Most of the upcoming supply in the residential market would cater to the middle-income segment.

While the high-end market would remain in demand this year, property developers would focus in developing more middle market condominium projects. Lui Matti, CEBRE executive director for asset services group says that shift from horizontal style
housing to the more practical condo type development shows the progress towards becoming a more competitive economy.

“We see 2012 as another buy year for shoppers with a wide choice of projects each with unique amenities and access to the right kind of financing,” says Matti.

CBRE also expects a sustained growth in the office sector this year as the vacancy rate
remained below five percent since the second quarter in 2011.
Rental rates continue to increase as a result of the growing demand for office space by BPO firms, traditional offices and the lack of new office supply last year.

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