Serendra blast affects real estate in short-term — analysts

MANILA, Philippines – While the blast at units in Two Serendra posh condominium on Friday evening, May 31 has potential homebuyers concerned, the incident will only have a short-term effect on demand and prices, real estate analysts said.

The incident won’t affect the long term demand and prices for retail units in Bonifacio Global City in Taguig, according to real estate consultancy company Jones Lang Lasalle. 

“Price won’t be affected by the incident no matter what the result will be. It could plateau but only for a short term. This is a short term effect,” Antonio Sabarre, associate director of markets at Jones Lang Lasalle told Rappler on Monday, June 3.

“Fort Bonifacio still has high demand for real estate and it will continue to be in demand,” he added, referring to Bonifacio Global City, one of the fastest rising business and residential districts in the country. 

Short-term impact

According to property broker Fitz Jerald de Vera of Property Central, the blast, of which the origin is yet to be determined, has caused concern among potential buyers for the Serendra property.

In a phone interview on Saturday, June 1, he said: “I have one client who is coming home in September to buy a unit in Serendra. She texted me immediately after news came out about the explosion. She is very concerned. I don’t know if she will still continue with the purchase.”

This concern was also reflected in the Ayala companies’s shares, which dipped on Monday, June 3. 

Ayala Land Inc. declined by 7.26% at P31.30 per share, making it the 7th top loser in the Philippine Stock Exchange main index. Shares of parent firm Ayala Corp., on the other hand, also declined by 1.35% at P621.50 per share.

Ten units were destroyed in the blast at Two Serendra Building B, a project of property giant Ayala Land Inc’s. The units are part of the Alveo Land brand, which caters to the upper-middle market. This block is situated in the 12-hectare Serendra complex, which also includes One Serendra, a high end project priced about 10% to 15% more than Alveo’s. 

Brisk demand for Fort properties

Serendra was Ayala’s first foray in the 240-hectare privatized military property in Taguig City. This project is located in upmarket Bonifacio Global City (BGC).

A Jones Lang Lasalle Leechiu (JLL) report released in April showed that this area remains a key market for upmarket and luxury residential property units.

According to the report, the breakdown of BGC’s residential units is made up of the following: 6% are worth P10 million and up, 34% are P6 million to P10 million, 33% are P3 million to P6 million, 27% are P1.5 million to P3 million.

According to JLL, BGC takes up 14% of the residential market share between 1999 to 2012. This is expected to dip to 12% between 2013 to 2018.

Property consultant CBRE’s first quarter 2013 Market Review states that residential sectors show no signs of a slow down as new projects in the luxury and mid-market segments come under way. 

The BGC residential market gets a boost from the growing demand for office and commercial. Some of the residents in Serendra and other high-rise condominiums at BGC work in the offices in the area.   

New office headquarters 

BGC has also benefitted from the expansion of global firms as it has become a viable alternative to Makati City in hosting the offices of global and local firms.

“Over the years, Fort Bonifacio has undergone continuous growth with the development of numerous office buildings catering to both corporate back-office and headquarters. Leasing activity in the district was largely driven by the continuous expansion of offshoring and outsourcing firms,” stated CBRE. 

According to Jones Lang Lasalle’s report, BGC remains the second largest development in Manila in terms of current supply: 0.52 million square meters compared to Ortigas Center’s 1.43 million square meters, and Makati’s 3.04 million square meters.

The area is expected to have the biggest boost in supply in the future of 0.70 million square meters mostly driven by new office space. According to JLL, BGC’s office supply when fully built will only be less than 30% of Makati. – Rappler.com

---

Related Stories: