This is the conclusion of my three-part property outlook for Property Report PH. As I highlighted previously, we are seeing challenges in the property market, mainly due to elevated mortgage rates, POGO exodus, and work-from-home scheme implemented by several firms which resulted in a tepid appetite for office and residential projects in Metro Manila.
But Colliers Philippines believes that there are opportunities that the market can capture starting 2025. I always stress in my columns that the rebounding leisure sector will continue to have positive impact on the Philippine property sector. This should somehow have a ‘halo effect’ on the struggling residential market.
Overall, we are seeing more property firms launching these leisure-centric projects. This initiative is complementing the shift to suburbia that we are seeing in the residential sector. My column last week touched on this bright spot for the Philippine property market so allow me to dissect this segment further.
Explore launching leisure-themed projects outside
Metro Manila
Developers have been taking advantage of the rising demand for resort or leisure-oriented properties outside Metro Manila. These projects were already popular pre-Covid but the pandemic only highlighted the need for these leisure-themed residential enclaves. Among the developers that have leisure-centric properties outside Metro Manila include DMCI, Rockwell Land, Megaworld, Ayala Land, Robinsons Land, Cebu Landmasters, and Damosa Land with projects located in Cebu, Davao, Bohol, Palawan, and Batangas. These projects remain popular, and Colliers encourages developers to further assess launching similar projects.
While the Philippine government failed to meet its target of 7 million international arrivals in 2024, we remain optimistic that international arrivals will only increase starting 2025. What’s important to note is that the Philippine government has been busy rehabilitating and modernizing its airport, and we believe that this is likely to play an important role in attracting more foreign visitors and international hospitality brands. It’s exciting to see Philippine developers firming partnerships with these foreign brands in launching and building foreign-branded accommodation facilities in thriving destinations across the Philippines.
Colliers Philippines believes that the focus on leisure property would continue but unlike the property cycle in the mid-1990’s, the development is more holistic and masterplanned with various land uses.
Colliers data showed that these projects were already popular pre-Covid but the pandemic only highlighted the strong take-up for these leisure-centric residential enclaves. Some of these leisure-oriented projects are dispersed across Batangas, Cavite, and Cebu. Other locations likely to attract similar investments include Palawan, Boracay, Bohol, and Davao. The demand for these projects should also get a boost from the recovery of the country’s travel and tourism sector. Colliers also sees the revival of demand for golf communities within and outside Metro Manila.
Exploring the viability of new leisure hotspots
A recent Colliers webinar poll showed that Palawan was the most preferred destination of our respondents (45%), followed by Boracay (17%), and Cebu (16%). Both Palawan and Boracay have been awarded as the third and fourth best islands to travel to, according to the Travel + Leisure Luxury Awards Asia Pacific 2024.
Colliers believes that hotel operators should remain active in capturing demand from domestic tourists who are enticed by impulse travel, as well as foreign visitors. Property firms should explore building either hotels or leisure-centric residential enclaves in popular destinations across the Philippines. Among the developers with leisure presence in Palawan are Brittany Corp., Megaworld Corp., Ayala Land, and Sta. Lucia Land.
Meanwhile, among the developers with resort-themed developments in Boracay, Cebu, and Davao are Brittany Corp., Robinsons Land Corp., Rockwell Land, Torre Lorenzo Development Corp., AppleOne Properties, Inc., Ayala Land, Damosa Land, Inc., and Cebu Landmasters.
Reaping the benefits of extended lease term
Colliers believes that the approval of the measure that extends the land lease term for foreign investors presents tremendous opportunities for the property sector especially for leisure segment. With the proposed amendments, we see the Philippines attracting more foreign hospitality players. Extending land lease is crucial as these foreign players bring a lot of capital to the Philippines, and extension of lease term is a step in the right direction as they establish profitability and expand footprint across the Philippines. The measure is a priority of President Marcos and is likely to be signed into law before the busy campaign season.
This is just one measure that supports other government efforts to attract more foreign investments. Definitely, the property sector is well-positioned to capture new and massive foreign capital. Interesting 12 months for the Philippine property!
