Where to invest if you have P5 to P100 million

‘The Bay Area has outperformed other locations in terms of rent rate and capital value increases. It is currently the best city to invest in,’ says Leechiu director for research, consultancy and valuation Roy Amado Golez. 

A 100-sqm. condo unit in the CBD will earn more than a 250-sqm. house and lot in the suburbs, but the latter will likely gain better capital appreciation and land does not depreciate.

Unlike stock markets that can be affected by a country’s political climate and trade policies, or sometimes by a president’s tweets, the real estate industry — especially in the Philippines — seems to have developed an immunity to political turmoil.

Real estate prices are rising at unprecedented rates in the Philippines, especially in Metro Manila. Even after having covered this sector in lifestyle for most of my reporting life in The Philippine STAR, it still boggles my mind when I am told by developers that the first units to be sold in condominiums are the most expensive units.

But not all of us can afford penthouse units — what if you’re a mid-level professional or an executive with an X amount of extra money after all your bills were paid at the end of the month? What sort of investment can you make and where?

So we sat down with Leechiu Property Consultants director for research, consultancy and valuation Roy Amado Golez, who’s had over 20 years of experience in various facets of the real estate industry from research, planning and marketing to project  implementation.

We asked Golez: Where are the best places to invest if you have P5 million, P10 or P20? Then we had to rethink our angle given that all these expensive signature residences are selling fast today and subdivisions designed for billionaires are rising. So we threw in P50 to P100 million as well.

FROM P5 TO P20 MILLION      

Golez says the residential condominium market in Metro Manila is experiencing robust sales especially in the central business districts of Makati, Taguig and the Bay Area.

“For P10 to P20 million, Makati and Taguig are the ideal places to invest in. As the established financial district, Makati generates a daytime population of about four million employees who enter the city on weekdays, versus a resident nighttime population of only 500,000. This has resulted to a high demand for the scarce residential condominium units that are more affordable than the prime residential townhouses and bungalows in the high-end Makati subdivisions,” Roy Golez says. “In addition to the locals, Makati has a large expat population occupying rental residential condominium units. Taguig (BGC, McKinley and Uptown) is now recognized as the newest modern growth center, and is the CBD leading in job creation from the corporates and BPOs. In these high-end locations, a P20-million or higher budget could purchase a 100-sqm. two-bedroom unit.”

For P5 million and higher, you can purchase a studio unit in Quezon City and the fringes of the Ortigas CBD and Alabang. “Rental income will be coming from students and young urban professionals, as well as BPO employees looking for more affordable rents but near places of work. Fringe Alabang is also an option as it is still accessible from the main business district with much lower rents.”

For P5 million and higher, you can purchase a studio unit in Quezon City and the fringes of the Ortigas CBD and Alabang. Photo by MJ Diamzon/Wikipedia

There is one area in Metro Manila that is outdoing them all and it’s the Bay Area where construction is as unending as the beauty of Manila Bay at sunset.

“The two main drivers of office space absorption – which are the BPO companies and the POGO companies – consider the Bay Area as an ideal location.”

“Notable is the Bay Area where demand of rental units is high,” he says. “This has resulted in fast take-up of units by investors looking for recurring income. The Bay Area has outperformed other locations in terms of rent rate and capital value increases. It has become a highly desirable location for investors, some of whom come from Mainland China.

“If you want your investment capital to grow, the Bay Area is currently the best city to invest in. The two main drivers of office space absorption — which are the BPO companies and the POGO companies — consider the area as an ideal location.”

If the huge Mall of Asia was enough to serve the shopping needs in the area when it first opened, that seems not to be the case anymore. With condominiums and offices now populated, developers are constructing office and residential buildings with support retail and malls.

“Whether you have P5, P10 or P20 million, the Bay Area should always be considered for investment. The neighborhood is experiencing an economic boom due to the influx of businesses and employment.”

FROM P50 TO 100 MILLION

Golez says that with a range of P50 to P70 million, three-bedroom units in Makati and Taguig’s high-end projects are good investments.

And if you want to be literally grounded to the land, you should look for “houses or open lots in Ayala Alabang, or the newer high-end subdivisions in the Daang Hari area.”

I live in Parañaque, and every time I drive further south through Daang Hari, I see tracts of land boarded up and announcing new subdivisions by companies like Filigree and Vista Land.

Some people — especially those with children — don’t mind the commute and toll fees on SLEX to their places of work in Makati and Ortigas or even further north; also, they just want a bigger space to call home.

“Land is a store of value especially with the increasingly scarce high-end subdivision lots. An increasing population that is also getting affluent will only increase the demand for such real estate.”

“For the P100-million budget, there are only a few projects with such larger sized residential units in the highest end of the scale.” Golez recommends Park Central, The Estate and Discovery Primea condominiums in Makati; Horizon Homes and McKinley West’s Billionaire’s Row in Taguig.   

“Small residential plots of land in subdivisions like San Lorenzo can still be acquired with that budget or look at the mid-sized plots in Valle Verde and Ayala Alabang.”

CITY CENTER OR SUBURBS?

If you have, say, P50 million and you don’t mind living in either a smaller, low-maintenance condo unit in the city center or a big high-maintenance house in the suburbs, which should you choose if investment is your primary goal?

Golez explains, “A residential condominium and a house and lot have their own merits, and likely cater to different needs. Buying a condominium unit would earn you monthly rental income due to high demand especially in CBD areas as it is proximate to work and various lifestyle hubs. A 100-sqm. condo unit in the CBD will earn more than a 250-sqm. house and lot in the suburbs because the condo located in the CBD  will mean less time in traffic and it is much more convenient since the support retail and service shops are typically only a short walking distance.

“However, a house and lot will likely gain better capital appreciation and land does not depreciate. The increase in population and the limited or scarce residential gated subdivision land will mean high demand as land as a product cannot be created since it is a limited resource.”

“Developers of master-planned residential projects have already considered in their planning the basic requirements of residents for school, commercial, and medical. Our young population (consisting of 67 percent of total population who are the Gen Z and Millennials) will eventually graduate from their studio and one-bedroom condominium units to look for larger houses in suburban locations as they grow a family.”

* * * 

Part two of “Where to Invest” will continue to look at growth areas, what drives land prices up, more tips on investing, and a discussion on the foreign ownership issue.  

Visit the author’s travel blog at www.findingmyway.net. Follow her on Twitter and Instagram @iamtanyalara.

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