Manila on radar for investors
The Philippines' capital is reinventing itself as a thriving place to live, writes Peta Tomlinson
With the property market growth hitting double digits this year, Manila has turned out to be one of the surprise packages. For the past few quarters, the Philippines' capital has consistently ranked among the top three among Southeast Asian countries - enough to at last catch the eye of overseas investors.
Lindsay Orr, chief operating officer of Jones Lang LaSalle (JLL) Philippines, admits Manila has suffered from an image problem. With a new administration, in 2010, set on cleaning up corruption, and gross domestic product growth of 7.1 per cent, second only to China, things are changing.
He agrees, though, that the nation's emergence this year as a property market bull "comes as a surprise to many people".
"Some looked at the Philippines as the sick man of Asia," says Manila-based Orr. "This year, all the fundamentals have come together. There is a real feeling of expectation in the air, and the real estate sector, in particular, is doing well. Even overseas investors are stopping by to take a look - we didn't get that before."
It stems largely from fresh confidence in the Philippines as a business base. A market once eschewed because of its domestic problems is now attracting investment from local and multinational companies in what JLL terms "the continued evolution of the business process outsourcing [BPO] industry". As the firm's new report notes, "even non-BPOs are investing in prime or grade A office stock, indicating a rise in business confidence".
This investment, JLL says, may propel the Philippines office sector to become one of the major markets in the Asia-Pacific region in the next few years. For an industry that didn't even exist a few years ago, BPO shows remarkable promise. Last year, it was a US$11 billion industry; this year it's tipped to top US$12.5 billion, employing 700,000; and by 2016 it could amount to anything from US$20 billion to US$25 billion, employing 1.2 million. "This means that more office space will be needed, and a lot more residences with it," Orr says.
