The burgeoning preference for opulence
Amid rising vacancies in the Metro Manila secondary condominium market and tepid take-up in the pre-selling market, Colliers sees the take-up for luxury and ultra luxury units remaining stable. Demand for these segments is primarily driven by a consumer base awash with cash, as well as investors banking on these units’ capital appreciation potential. Astute investors also utilize these properties as hedges against inflation.
Return of expats
The return of more expatriates should also partly lift demand for luxury units.
Colliers has observed that the expat leasing market has picked up since 2022 as more foreign employees return to the Philippines and to the traditional office setup. We have seen Fort Bonifacio, Makati CBD, Ortigas Center, and Rockwell Center as the most preferred locations of expats due to the condominium units’ large cuts and the projects’ proximity to offices, schools, hospitals, and retail establishments.
In terms of age, some of the residential buildings have been in the market for more than 20 years but still enjoy high occupancies and command premium rents. Aside from being well-maintained, these high end properties are preferred by business executives looking for hotel-like amenities and services.
A cut above the rest
These prime units are a cut above the rest and are the primary choices of top MNC officials and diplomats.
An example would be Rockwell properties in Makati City. Besides sustaining occupancy rates at about 90 percent to 95 percent, these developments also continue to command high rents due to the “convenience, accessibility, and exclusivity” they provide to tenants.
Expatriate families are particularly attracted to Rockwell’s “community vibe”. Residents of this masterplanned community enjoy exclusive access to weekly club activities, where expatriates and their children get to interact with other Rockwell residents.
Makati CBD
Prime residential buildings in Makati CBD also continue to attract consular officials as well as high-ranking executives of MNCs and top Filipino companies holding offices along Ayala Avenue.
Note that Makati CBD enjoys a relatively lower office vacancy rate of 10.2 percent as of Q1 2024. While other business hubs in Metro Manila are recording vacancies of between 20 percent and 30 percent, Makati CBD continues to enjoy sustained take-up from local and foreign traditional and outsourcing firms. This helps fuel the demand for prime residential units in the country’s primary financial district.
Fort Bonifacio
Meanwhile, some upscale to ultra luxury condos in Fort Bonifacio continue to enjoy high occupancies as they complement the surge of multinational knowledge process outsourcing (KPO) firms in this bustling business hub.
Major KPO firms such as Google, Towers Watson, JPMorgan, Bytedance, Ubisoft Entertainment Philippines, PWC, and Deutsche Knowledge Services have established operations in Fort Bonifacio, while the transfer of the Philippine Stock Exchange should entice more multinational finance companies to open shop in the area.
The influx of these foreign companies should bring in more expats and hence raise the demand for luxury condominium units. Expatriates are also drawn to the business district due to the presence of international schools, translating to a live-work-play-shop-learn environment.
There’s no question that luxury and ultra luxury pre-selling projects continue to be offered in Makati CBD and Fort Bonifacio. These business hubs continue to be the most desired addresses of top local and foreign firms operating in Metro Manila.
As I stressed previously, these established business districts offer high quality and sustainable office towers, luxury and ultra luxury residential projects, as well as upscale malls that serve as the go-to establishments of local professionals as well as foreign employees and their growing families.
Catering to astute investors’ preferences
Overall, these premium residential units entice both end-users and investors due to their proximity to the bustling business districts of Ortigas, Makati, Rockwell, and Fort Bonifacio.
Aside from providing tight, round-the-clock security, these properties also offer well-equipped gyms, resort-like pools, ample parking space, quality interiors, among others.
These high end residences are also a stone’s throw away from major shopping hubs in the metro including Greenbelt, Glorietta, SM Makati, Power Plant, Uptown Mall, Shangri- La Plaza mall, The Podium, and SM Aura—establishments that house a mix of local and global retail brands that mainly cater to the affluent residents’ discerning preferences.
Colliers data show that the demand for luxury and ultra luxury residential projects is not confined within Metro Manila. Outside the capital region, we are seeing a more pronounced launch of premium residential units.
Developers with projects catering to the upscale to luxury markets outside of Metro Manila include Megaworld, Robinsons Land, Vista Land, Rockwell Land, Ayala Land, Filinvest Land, Arthaland, and AppleOne Properties.
These are also among the most expensive condominium projects outside Metro Manila and are enjoying good take-up rates ranging from 30 percent to 100 percent.
