Why Makati remains a prime real estate spot
MANILA, Philippines - For real estate investors, the appeal of Makati’s Central Business District needs no explanation.
“It's the address if you want to establish yourself,” says Jan Custodio, Head of CBRE Philippines' Global Research & Consultancy Group. "Makati has been and will always be the central business district. It is the preferred headquarters of most multinational corporations and prestigious local companies." As a neighborhood, Custodio adds, "it is the address that has all your needs right in front of your doorstep. Suffice to say, it’s one of the most coveted addresses in the country."
After the 2nd World War, the runways of what was then the Nielson International Airport became Ayala Avenue and Paseo De Roxas. Around these strips, foreign and local investors started planting their roots, eventually transforming Makati into the vibrant, booming city that we know today.
There are many reasons to invest in a Makati space now. Most consider business opportunities, office space and access to basic services, like medical care. But what about those who would like to consider Makati for residential purposes, especially with the upscale, vertical residences available? What should you expect?
If you’re planning to invest in residential property anytime soon, here are reasons why it should be in the heart of Makati.
Costs are still competitive
In 2014, average rates for a luxury, three-bedroom unit in Makati rose by 13.4% from the previous year. Real estate analysts welcome this rate, because it dispels all rumors of a “real estate bubble” saturating the residential market.
Furthermore, compared to the rest of Southeast Asia, the Philippines still has one of the best prices for real estate. “In Singapore alone, the stamp duty tax that you're paying is enough to buy 1 or 2 homes here in Makati,” Custodio says. According to data from CBRE, average take-up of vertical subdivision units in Makati City increased from about 8 units being sold per month, last year, to 17 units per month this year.
There’s no let-up in the space demand
The Philippines’ GDP might have dipped during the first quarter, but this should not affect the real estate market (READ: No ‘goat year’ for PH real estate in 2015). “The slowdown of the GDP is attributed to the government not spending enough. In terms of the private sector, I don't see anyone slowing down; consumer spending is still going strong,” Custodio says.
Along with the boom in the services sector, remittances from Overseas Filipino Workers are further fueling the demand for premium space. The availability of more jobs in Makati means more employees who will be looking for convenient accommodations. For OFWs, owning a Makati CBD unit now can be an investment opportunity for those who are willing to rent out their space in the meantime.
The international market is line to further hike up the demand. Currently, foreign investors can only own 40% of a building’s total space area. But with the onset of the ASEAN integration and the new transactions that it will bring in, expect policies favoring more direct foreign investments to be implemented (READ: BPOs, office spaces, keep real estate on the rise).
The neighborhood continues to evolve
Aside from competitive prices and profit opportunities, one question remains: “Will I enjoy living here?”
The simple answer is ‘yes.’ Even the constant traffic in Makati is a good sign – it means that business is booming and commercial growth is far from dying down. This is why Makati’s working and residential population continues to merge as more people relocate closer to the workplace. Most prefer condominium living, not just because it’s cost-efficient, but also because it’s conveniently located at the center of everything.
In particular, Makati’s Legaspi and Salcedo Villages are increasingly becoming hubs for all kinds of creature comforts – from food, to wellness, to pursuing a new skill. Despite the perennial buzz of activity and even the rush hour traffic, Makati’s CBD has no shortage of walkable streets, pocket gardens, and other relaxing areas where one can enjoy a little respite and quiet. (READ: Meet the neighborhood)
In the coming years, expect the steady influx of multinational companies, more efficient construction projects, and a wider range of lifestyle offerings to keep this district the prime choice for those seeking a better address. – Rappler.com
- CBRE Philippines
- Megaworld Corporation