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MANILA, Philippines – Tourism remains the “next big thing” in Philippine real estate.
David Leechiu, the country head of real estate consulting firm Jones Lang LaSalle Philippines, stressed this during the October 22 industry briefing for clients of BPITrade.com, the online stock brokerage subsidiary of the Bank of the Philippine Islands (BPI).
“The hotel sector is undergoing rapid evolution, very rapid. There are about 15,000 hotel rooms today. We are going to double that in the next 3 years,” he reportedly said, according to a statement BPI released on Friday, October 25.
Almost 12,400 rooms are in the pipeline for completion between 2013-2017, he said. About half of these will come from 3 of the 4 investors granted the right to develop casino and entertainment complexes at the Entertainment City complex in Paranaque City, Manila’s bet for gambling revenues in Asia.
Solaire Resorts and Casino of Bloomberry Resorts Corporation led by tycoon Enrique Razon was the first to launch its casino and high-end hotel catering to luxury clients in March.
City of Dreams Manila will be the second to open in 2014. It carries the hotel and casino brands of Macau casino developer Melco Crown, the partners of the business group of Henry Sy, the country’s richest man.
The rest of the hotel rooms will come from properties located in Makati City, Ortigas Center in Pasig, Bonifacio Global City in Taguig, and Newport City in Pasay, among others, Leechieu noted.
He shared that an opportunity exists in the 2- to 3-star hotel market, especially in the growth corridor spanning Metro Manila all the way to Laoag in northern Luzon.
He noted that Quezon City itself has limited supply of business hotels rooms, as well as Ortigas Center in Pasig, Clark in Pampanga, Baguio City, and more.
Tourism goals
Leechiu said the hotel sector of the industry still has “huge opportunities” to tap in the existing local tourism market, which itself has a lot of room to expand.
Of the total international tourism receipts of USD1.075 trillion in 2012, the Philippines’ share was a mere $3.82 billion.
The Aquino government is aiming to hike tourist arrivals to 10 million by 2016. (INFOGRAPHIC: Is 10-M tourists goal possible?)
It expects to breach the 5-million mark this 2013, the highest in history but below the 5.5 million original target.
In 2012, 4.2 million foreigners visited the country, equivalent to less than 1% of the total tourist arrivals of 1.035 bilion worldwide.
The government is banking on its tourism campaign, “It’s more fun in the Philippines!” as well as relaxed rules on access to key tourist destinations for foreign airlines.
Office sector
The real estate consultant also shared the growth potential of the office market.
He said there are 8.5 million square meters (sqm) of properties from now till 2016 across the various business districts in Metro Manila.
In terms of future supply, Bonifacio Global City has the biggest area, at 900,000 sqm.
“Assuming that the Philippines posts a stable fiscal position and good credit standing by 2013/2014, we may expect other demand drivers — such as financial services, insurance companies — to create an additional demand of anywhere from 20,000 sq m to as much as 100,000 sq m of office space from non-BPO (business process outsourcing) and traditional offices,” he said.
The briefing is an effort by BPITrade.com to “provide an additional service to clients so that they broaden their outlook on investments,” explained BPITrade director Ricky Liboro. – Rappler.com
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