With only a few direct investment deals recorded, the transaction volume remained low, possibly reflecting trends seen in the global economy which started the year facing rather uncertain conditions, particularly in the capital markets. In addition, the upcoming presidential election has made some players exercise caution and hold back investment decisions.

In the past six months, surprisingly, Clark Freeport Area has remained as the focal point of investment demand, with two deals pushing through this quarter. Seemingly, Filinvest is the most bullish on Clark after the company secured another large-scale land deal in the area. The Filinvest consortium won the bidding for the 202-hectare Mimosa Leisure Estate property through a 75-year lease agreement as a lone bidder with a consideration of PHP800 million. Prior to this transaction, last year, Filinvest also committed to a joint venture with BCDA to develop some 288 hectares of land in Clark Green City, increasing its land bank in the area to almost 500 hectares.

Another notable transaction in Clark this quarter was the acquisition of Hotel Stotsenberg and Casablanca Casino by Frontier Capital Group for a consideration of PHP1.2 billion. The property includes 239 hotel rooms, 190 slot machines, and 36 gaming tables. Upon full takeover, the foreign investor has announced its intentions to expand the casino property, given the robust growth of the gaming industry in the country.

However, the most active player this quarter was Sta. Lucia Land. The low-cost housing developer announced the acquisition of 13 sites totalling 97 hectares in various locations across the country. Its aggressive growth strategy is focused on tapping the underserved economic housing sector, which, according to the Subdivision and Housing Developers Association (SHDA), currently has a backlog of 4 million units.

On the development side, two new joint ventures were announced in the first three months of 2016. The latest addition to Metro Manila’s township map is the partnership between Ayala Land and Eton Properties in co-developing a 35-hectare property into a mixed-use township. On the other hand, boutique developer ArthaLand announced a joint venture with overseas investor Arch Capital for a mixed-use development on an 8,400-sq m property in Cebu.

Despite the sluggish start, 2016’s investment market is expected to pick up in the coming months. We expect the transaction activity to reach similar levels to 2015, supported by positive economic conditions and the aggressive expansion plans of local developers.

View the full report here.