Tuesday, December 30, 2014

Real Estate in 2015, Part 7: Investments

2015 is upon us. What does the forthcoming year herald for the property industry? According to experts, the market for real estate is poised for further growth, thanks to several key factors. 

Among these factors, the primary contributors have been identified as the ASEAN integration, the rise of the BPO industry, robust OFW remittances, a growing middle class, and a boom in the retail industry and tourism industries, as noted in previous articles. 

Finally, to conclude this series in looking ahead at the coming year, take a look at how investment activity is expected to fuel -- and fare in -- the real estate market in 2015.

7. Investments

Investment activity in general has been lucrative for the current economy. The country's credit ratings have consistently improved, starting with a bump up in credit rating issued by Moody's in March 2009. This December, Moody's has once again upped the country's rating. To date, Moody's, S&P, and JCRA -- top credit rating agencies -- hold the Philippines at a score of Baa2/BBB, a lower medium grade.(1) Meanwhile, Fitch Ratings has given the Philippines a slightly lower grade of Baa3/BBB-.

Credit or investment ratings are an evaluation of the credit worthiness of a borrower, often of a company or a government. While not, in itself, a stellar figure -- being one that connotes moderate credit risk -- the Baa2/BBB rating is nonetheless a more "positive" outlook; an improvement over past ratings given to the Philippine government.

Within the Asia-Pacific region, Metro Manila is the fourth leading destination for real estate investments, according to an early 2014 survey by Urban Land Institute (ULI) and PricewaterhouseCoopers(2). Ranked at 12th place in the previous year, Manila rose by eight places thanks to the outsourcing sector, efforts to improve transparency in governance, GDP growth, and OFW remittances, among others.

And it's a trend that ought to continue. According to advisory firm CBRE Philippines, investment activity should see further growth in the future. President, chairman, and CEO of the company, Rick Santos, issued that "the continuous transformation of cities into business landscapes will only strengthen the position of the country as an investment destination in the coming years."(3)

The prevalence of townships that integrate residential, retail, business, and recreation into one masterplan has also appealed to investors, said CBRE.

Pertaining to such townships as Bayshore, City Gate, McKinley West, Arca South, Capital Commons, and Vertis North, among others, CBRE expressed that “the diversity of these developments is giving investors a more convenient and creative way to maximize each area."


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Investment activity is key to a thriving economy. And with a fast-growing economy, the real estate market should see itself thriving, hand in hand, in the year to come.

___

(3) Rappler 


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