Joey Roi Bondoc is a Research Manager at Colliers International Philippines and is tasked with producing high-quality reports that cover the office, residential, retail, leisure and industrial segments of the real estate market. 

He conducts macroeconomic analysis and regularly assesses the impact of economic growth on the real estate sector. 

Bondoc handles client engagement through market overview presentations to equity analysts, property investors, and real estate firms. 

WILLIAMS MEDIA spoke with Bondoc about his experience in the real estate industry and Manila's real estate market. 

Tell us about your experience in the real estate industry that led you to this point in your career with Colliers.

Before joining Colliers I worked for a research and consultancy firm where I handled business, political, and macroeconomic analysis. I was already covering property development before joining Colliers but the scope was more macroeconomic.

Now with Colliers, I handle both macro and micro real estate data. My colleagues and I go out and validate primary real estate information.

I think my experience with a think tank helped me to view and understand property development on a broader scope and see other economic segments’ impact on the real estate market.

What are the defining moments in the Manila real estate/expat history?

Similar to other economies, the Philippine property sector is highly cyclical and is susceptible to periods of expansion, overbuilding and a subsequent crash and price correction. These cycles were prevalent in the 1980’s during and after the Marcos era, and also during the Ramos administration in the 1990’s which saw the Asian Miracle followed by Financial Crisis of 1997.

The Manila property market experienced a major downturn during the Asian Financial Crisis in 1997-1998. Tighter central bank regulation and fiscal reforms implemented by the government during the mid-2000’s partly shielded the local market from the adverse effects of the Global Financial Crisis in 2008-2009.

At present, the Manila property market is being redefined by the proliferation of Chinese offshore gaming companies. We saw a slowdown in the office space demand of BPO firms but this was offset by the demand from offshore gaming firms from China. These firms are not just contributing to the accelerated office and residential demand in Metro Manila but are also transforming other sectors such as retail and leisure.

Where are the key emerging markets that people should be looking to in Manila that you think will have upside?

The worker accommodation market is expanding due to the growth of both traditional and business process outsourcing (BPO) firms. Over the past 12 to 24 months we have seen major players diversifying into this segment to cater to the highly-mobile young urban professionals who can’t afford to own their own apartment yet or rent a condominium unit within the established business districts such as Makati, Fort Bonifacio, and Ortigas Center. The dormitories for professionals are more practical as the worsening traffic in Metro Manila only makes employees’ commute to and from work more unbearable.

Office will continue to be driven by BPOs as well as higher value KPO firms; traditional office occupants such as auditing, architectural, and logistics firms; and some government agencies looking for bigger space. Offshore gaming firms are now exploring space outside Manila and we see Cebu, Laguna, and Pampanga capturing the bulk of the demand.

The retail segment will continue to grow due to higher spending from millennials and sustained flow of OFW remittances that fuel household spending. With smaller malls being developed across Metro Manila, developers need to ‘differentiate’ to stay in the game and sustain consumer traffic despite the rising popularity of online shopping.

For leisure, we see the sustained development of three- and four-star hotels outside Manila as well as the development of homegrown brands such as Seda, Aruga, Savoy, and Quest.

The Manila Bay Area is another exciting sub-location in Metro Manila. The thriving business hub will house major office and residential projects over the next two to three years.

What advice would you have for those looking to come into markets like the Philippines and set up business?

This is an interesting period for the Philippine property market – for both investors and end-users. The economy, in general, has been expanding and growth is spilling over to the real estate segment.

The Philippines is benefitting from having a young population with increasing disposable incomes. This has been fueling retail and hotel spending across Metro Manila and in other urban areas outside of the country’s capital.

The government recently enacted a law that aims to speed up the process of registering a business in the country and we see this measure enticing more start-ups to open shop in the country.

Freelancers and micro, small, and medium enterprises (MSMEs) have also been increasing in numbers and this is encouraging local and foreign co-working space operators to acquire more space all over Metro Manila. The government is pushing for the passage of the Innovation Act and MSMEs’ Easier Access to Financing which should result in the establishment of more businesses in the country. Start-ups are the major occupiers of co-working space.

Who is your typical client? 

Colliers Philippines’ Corporate Research Group supports our service lines in providing value-added services to clients. We help them engage our existing and potential clients with our insights through market briefings, property reports and special white papers. These clients are varied: from property developers, start-ups, manufacturers and equity firms, to foreign and local investors looking at diversifying into the property segment.

What would you like to see changed in the industry in 5 years?

For one, the completion of infrastructure projects in and outside of Metro Manila would be a welcome development. We believe that the property segment is one that will greatly benefit once these infrastructure projects are delivered.

Among the key projects that will create a huge impact if completed over the next five years would be the MRT Line 7, passenger rail lines from Manila to Clark and Manila to Bicol, Subic-Clark cargo rail project, Clark Airport expansion, and the first few stations of the Manila Subway system.

Another would be the development of more sustainable integrated communities. Greater expansion of property firms outside Manila should open more business opportunities and unlock land values in key urban areas. The current administration is pushing for greater foreign participation in key economic sectors such as retail and construction and this presents tremendous opportunities for the Philippine property sector moving forward.

What are some key opportunities in the marketplace at the moment?

Dormitory housing for young professionals. This segment offers an opportunistic demand that developers have been trying to tap.

Integrated communities that incorporate the live-work-play lifestyle is another opportunity. We believe that the government’s push to usher in the ‘golden age of infrastructure’ should provide the impetus for the development of townships across Metro Manila. This should be complemented by a more aggressive construction of transit-oriented projects in and outside of the country’s capital.

There is also a demand for LEED and WELL certified buildings. The Menarco Tower in Fort Bonifacio, for instance, is the only WELL-certified building in the Philippines. We believe that it is only a matter of time before other developers follow. As developers ramp up construction of office buildings across Metro Manila, product differentiation plays a crucial role in ensuring that office towers are appropriate to the needs of the tenants. Today’s labour force is also more discerning in choosing which companies to work in and the type of workspace is critical in attracting and retaining top talent.

A more aggressive push to build infrastructure projects across the country also presents opportunities to developers especially those that have units engaged in the operation and maintenance of airports, seaports, toll roads, etc.

What advice do you have for people looking to buy property in Manila?

• Location. Location. Location. People pay a premium for a certain location.
• Research. Look at the developer’s track record; the project’s location; and price per unit.

There are upcoming locations that are very feasible investment locations but also offer discounts. These include the emerging master-planned communities in Metro Manila.

For end-users, we recommend that they consider developments in integrated communities as these enhance working and living conditions. In fact, smaller-sized retail and office developments are being created in line with the live-work-play philosophy.

We recommend that investors look at projects in townships due to possible yield enhancement. Given that capital values in established CBDs have significantly escalated in recent years resulting in yield compression, lower entry price for strata-titled office and residential developments could offer some enhancement in yields.

What advice do you have for people looking to sell property in Manila?

Look at growing tourist markets; aside from Chinese and Korean tourists, we are seeing vast growth from Indian visitors. We believe that some of these tourists eventually decide to stay in the Philippines so looking for a property to invest and stay in follows.

Consider the profile and preferences of your target market.

Generally, for developers, differentiate projects. In the increasingly competitive environment, developers need to distinguish their projects from others.

The developers’ differentiation strategies must be anchored on placemaking or the multifaceted approach to the planning, design and management of public spaces. Placemaking compels developers to assess each community’s distinct assets and potential and eventually build facilities that will maximize those features. A well-thought-out placemaking strategy should keep people interested to stay in an integrated township. Overall, placemaking should help transform places into destinations where people can synergistically converge.

Are there any particular trends in demand or foreign investment you are seeing at the moment? 

We are seeing the entry of more foreign retailers into F&B and home furnishing. IKEA will open its first branch in the country in the next few years. We project a more active participation from foreign retailers once the government lowers the minimum amount of paid capital required to open shop in the Philippines.

Manufacturing investments continue to grow despite uncertainty surrounding the implementation of the second package of the tax reform program which rationalizes incentives given to investors. We believe that more manufacturing investments should result in increased absorption of industrial space and warehouses in major industrial hubs across the country.

Foreign hotel and serviced apartment brands are being brought into the country by local developers, including the Cebu-based ones. We see this strategy being employed by local developers in other urban areas as foreign branding is important particularly in the high-end (four- and five-star) markets.

Colliers Philippines has been receiving queries from firms based in Japan, Hong Kong and Mainland China planning to tie up with local developers. Gross yields for property investments in the country are among the most attractive in the region and this encourages foreign companies to be more aggressive in partnering with local firms for various residential projects. We believe that local and foreign companies mutually benefit from joint venture projects. While foreign firms are enticed by high yields derived from Philippine projects, local developers can improve their brand image by partnering with prominent foreign brands known for their precision and high architectural and engineering standards.

Where do you see the Manila property market in 10 years and what needs to happen for the market to reach that point?

We want to see the completion of infrastructure projects that are currently under construction; development of more sustainable integrated communities; and decentralization of business opportunities which should result in the creation of more businesses in surrounding urban areas such as Cavite, Laguna, Batangas, Pampanga, Bulacan, and Tarlac.

A more equal distribution of investment opportunities should compel developers to build supporting offices, residential projects, malls, hospitals, and recreational facilities in these locations. This, we believe, should redound to a more sustainable growth of the Philippine economy and the property sector.

For more information about Manila's real estate market, phone or email Joey Roi Bondoc, Research Manager at Colliers International Philippines via the contact details listed below.

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