Philippine Daily Inquirer
4:33 am | Wednesday, January 15th, 2014
Despite attractive underlying fundamentals, the Philippine office property sector has not attracted significant foreign investments but this could change in the next two years, said a cross-border investment expert from Jones Lang Lasalle (JLL).
Alistair Meadows, head of international capital group at JLL Asia-Pacific, said in an interview that Metro Manila’s office sector was becoming “increasingly attractive,” with underlying fundamentals becoming a “standout within Southeast Asia and within the broader Asia-Pacific region.”
Asked whether the string of natural disasters that hit the Philippines had diminished the attractiveness of its property market, Meadows said that while these events raised awareness of what could happen in terms of natural disasters, it would not cause jitters for a long time.
“We had a similar situation in Japan after the (2011) tsunami that had a direct effect on the real estate market. From an international perspective, there was nervousness but Japan has recovered very strongly. Yes, investors will look at issues like that but that won’t prevent them from investing in a market if the other market fundamentals are sound,” he said.
Meadows, whose job is to facilitate cross-border capital transactions at JLL, said confidence among tenants and the potential for rental growth were a strong factor for the Philippines at this time. As such, he said the trend of lackluster foreign investment inflows into the local office market might change in the next few years.
“Today, we haven’t necessarily seen any meaningful foreign investment in the Philippines in the office sector partly because the domestic players are very well-capitalized. They have strong balance sheets and, therefore, they are not necessarily looking at selling assets,” Meadows said.
Meadows said the broader set of macro-challenges for any foreign investor looking at cross-border investment would consist of issues relating to taxes, foreign ownership in the market and also whether there is a REIT, or real estate investment trust market.
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Tags: Alistair Meadows , forecasts , foreign investments , Jones Lang LaSalle , Philippines , property , Real Estate
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