THE PHILIPPINE property sector is seen to remain in a sweet spot.
Benefiting largely from credit ratings upgrades, sound business climate, unprecedented economic growth, and sustained investor interest, the real estate sector is thus expected to continue its bullish run, prompting many players to launch new projects that would cater to the growing demand across segments.
The wide array of options however presents to the consumer a certain difficulty in making a choice that will give him the best yield out of a big-ticket investment as real estate. Investing in property often calls for a better understanding and careful study to ensure that one arrives at an informed decision.
Colliers Research and Advisory Services Director Julius Guevara explained that a great investment is one that offers the highest reward for the least risk involved. And real estate, he further opined, is generally considered as one of the safest investments, especially if the location is a prime one.
“For example, if you look at the period between 2006 and 2012, 91-day treasury bills offered an annual return of 3.3 percent, corporate bonds had a return of 9.8 percent, the stock market performed the best at 17.6 percent, while premium real estate offered a total return (rental yield and capital appreciation) of 11.4 percent,” Guevara said.
“Therefore, real estate was the second best investment during that period. However, if we take into account the volatility of returns or what we can label as risk, the stock market can swing plus or minus 11.6 percent. Meanwhile, real estate’s volatility is only 1.9 percent, which is lower than corporate bonds (3.2 percent) and only a bit higher than the T-bill rate or what is considered nearly risk free (0.4 percent)” he explained.
Guevara noted that there were times in the past when investing in real estate would have been cheaper, such as during the aftermath of a downturn with the likes of the Asian financial crisis in the late ’90s. Today, the Philippine real estate industry is experiencing a peak in residential real estate development where demand has been normalizing and supply continues to be high.
“On the other hand, office development continues to be propelled by continuous demand from the business process outsourcing (BPO) sector. So while I cannot say that today would be the best time to buy for all types of proper- ties, there are still great opportunities where rental growth and capital appreciation would perform higher than average,” Guevara further said.
According to Guevara, those considering investing in real estate should take note of certain factors that make one property a better investment than the others. He noted that the popular tenet of real estate investment that location should be the focus continues to hold true, as assets that are in prime locations tend to hold their value.
“The location would ideally have the comforts of an urban center, wherein shopping centers and offices are only a few steps away. Public transportation and infrastructure would also define the value of the location,” Guevara said.
All these factors are what precisely made Arca South, the latest development from leading property developer Ayala Land Inc., a truly wise and practical investment as it has all the necessary elements and characteristic of a master- planned community. It is one development that would afford all the conveniences of modern day living and yet being able to provide that perfect balance of a laid back and relax lifestyle.
Arca South pledges to carry ALI’s long history of developing large-scale, integrated mixed use communities. All of the lessons learned and expertise gained from developing other existing business districts such as Makati, Alabang, Bonifacio Global City, Cebu Business Park, Nuvali, among others, are brought to bear on Arca South.
“ALI has constantly maintained its track record in developing master- planned communities. ALI pushes the envelope further as it builds Arca South from the ground up with ALI’s expertise in farsighted urban-planning for this large-scale community development,” said Arca South Project Development Manager Stephen Comia.
The P80-billion Arca South development in Taguig City is set to become the gateway to Metro Manila and is envisioned to open up doors of opportunities for people coming from the south. Typical with any of ALI’s large scale developments, Arca South will consist of a diverse set of land uses that will be developed over a period of time under a pre-established framework.
This 74-hectare project is envisioned to be a thoroughly connected development and a highly networked business and lifestyle district that will redefine the way people view the urban metro landscape. And since it is being developed by a reputable developer like ALI, Arca South is thus guaranteed to deliver great returns, as it will carry the stamp of excellence that the brand has been known for.
A showcase of what a master planned, city-in-sync community is and ought to be, Arca South allows for an organized, coherent and efficient use of land that will have a positive impact on its surroundings in the form of enhancement of the quality of environment, appreciation of land values, and acceleration of economic activity.
“Arca South is envisioned to be the next big thing—a natural extension of Bonifacio Global City. Arca South will be an alternative to the metro’s central business districts (CBDs) that are home to skyscrapers. We are designing it to be an in-city campus type development wherein buildings are mid-rise and 40 percent of the development will be dedicated to open spaces,” Comia noted. “It will be a development that will have all the necessary components to make it a premier CBD. ALI shall be investing all its product lines—from the retail to office, a hotel, three residential brands (Ayala Land Premier, Alveo and Avida) and even a hospital all in one location, and all done at the same time,” he further shared.
Currently, ALI is going full blast with its construction activities at Arca South, as it is bent to complete the development within its set timeframe, and thus giving potential homebuyers and locators a better reason to consider being a part of this latest master- planned community.
“First time buyers should have Arca South as a top choice in terms of investment as there is more potential for value appreciation as the community develops over time. The experience of the first buyers in Serendra is best example. Values of units have multiplied since the project was launched,” Comia said.
Guevara also reminded first time investors to carefully study the property they intend to invest in and to choose developers with a solid reputation and untarnished record.
“As a first mover investor, you could maximize the potential increase in capital value as the township or central business district becomes fully built up. While rents may not be as high once the initial project is completed, it will slowly move up as the other components of the development, such as retail and office, are completed. You will also have the benefit of enjoying rental income earlier as the other projects are being completed,” Guevara concluded.