29 April 2019

The Philippines: A Real Estate Investment Hotspot

By Kehkashan Khan on Real Estate

The Philippines is an archipelago famous for its extremely varied topography with over seven thousand islands. Rich in culture and gastronomy, the country is all set to conquer the world with its uniqueness that is seen in every part of the country. With over 10 million population, it has succeeded in setting itself apart from the rest of the Asian world as a country that has the capability to cater to people belonging to any social class. The facilities this country offers can fit in any budget. This is exactly what makes it a center of attention for expatriates all over the world. Like many other industries such as tourism, hospitality, and manufacturing, Philippines has made a name for itself in the real estate industry as well. Many foreign investors are now investing in the real estate sector for lucrative gains and hence, making it a true real estate investment hotspot.


Over the past 17 years, regulatory reforms have played a significant role in the development of the real estate industry in the Philippines. The results have proved to be so fruitful that the real estate landscape of the country has transformed into a highly reputable market among the Big Three credit rating agencies i.e. the Standard & Poor, Moody, and finally First Fitch.

Although the last two to three years have been quite tumultuous for the Philippines, it has been performing well on the economic front with a continuous Gross Domestic Product (GDP) growth of 6.7% in 2017 & 2018. The Philippine Statistical Authority (PSA) alluded to tourism, trade, manufacturing, real estate, renting, and other business activities as the main drivers of the economy.

The real estate development spending in the Philippines has been reaping considerable benefits in the form of huge Return on investment (ROI) in the last three years particularly. SM Prime Holdings, one of the largest integrated property developers in Southeast Asia, continues to maintain its position among the top real estate developers in the Philippines by furthering ground-breaking and affordable lifestyles through the development of hotels, offices, residences, convention centers, and shopping malls. A source reported their net income of P23.8 billion for the year of 2016. SM Prime Holdings reports a consolidated increase in its net income by 17 percent in 2018 compared to the year of 2017. The net income of this property developer has reached up to P32.2 billion in 2018 from P27.6 billion of 2017.


On the other hand, Ayala Land, Inc. (ALI), the real estate subsidiary of Ayala Corporation, saw its net income increase by 17 percent in 2018 (marking its 30th year with the theme “co-create the future) compared to the earlier year. With a net income of P20.78 billion, the consolidated revenue of the company also rose up to P119.7 billion, 21% higher than the previous year. Ayala Land, Inc. continued to stay in the real estate vanguard by generating robust results from its core businesses in strategic landbank management, shopping malls, residential & commercial development, corporate businesses, and hotels.    


With its new stature came new triumph that has transmuted this piece of earth into a haven for local buyers and foreign investors alike. Despite facing a huge number of natural disasters, the Philippines has proved to be highly resilient. For the last 5 years, the real estate industry of the Philippines has been flourishing and thus, opening new avenues for real estate investment.

Now, you know that the Philippines is a hotspot for your safe real estate investment but which investment strategies will work best for you? Our AXE Real Estate Consultants can best guide you through this. Contact today!           

About the author

Kehkashan Khan


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