Condominium vacancies continued to rise amid new project completions according to Colliers International in its latest Q4 2015 Research and Forecast Report for the Philippines, published late last week.
Colliers reported that during the fourth quarter of 2015, vacancies in Makati’s central business district (CBD) rose overall by 67 basis points to 8.9 percent, with the increase more apparent in the premium segment with an increase in vacancies of 1.5 percent to end at 5.95 percent.
Similarly, Fort Bonifacio prime condominium vacancies rose by 1.2 percent to 7.1 percent. Overall vacancies stood at 8.57 percent.
Ortigas Center condo vacancies also rose slightly to 10.4 percent.
Three new condos completed in major CBDs locations during the latter part of 2015 in Makati CBD (The Lerato Tower One), Fort Bonifacio (West Tower at One Serendra) and Ortigas Center (One Shangri-La Place North Tower), totaling 1,581 new units. No new projects were completed in Rockwell Center and Eastwood City during the period.
All in all, 6,209 units were added in 2015 in the major areas that Colliers monitors.
Residential rental rate appreciation slows
Rental rate growth slowed down on average to 1.1 percent for all major areas, Colliers noted. Rockwell Center condominiums continued to command the highest rates per sqm, averaging at PHP 963 per sqm for premium units. Makati CBD unit rents averaged at PHP 883 per sqm – growing by 0.91 percent while Fort Bonifacio premium condos were slightly higher at PHP 891 per sqm with 1.0 percent growth. Ortigas Center prime condominiums averaged at PHP 506 per sqm, anincrease of 1.2% from the previous quarter.
Colliers maintained its outlook that if the 13,500 units scheduled for 2016 are indeed completed, rental rates may drop by an average of 5 percent by the end of the year due to the increase in competition for tenants.
Residential capital value growth decelerates
Capital value growth slowed further, increasing by only 0.8 percent compared with the previous quarter’s growth in the major districts. Premium units in Rockwell continued to command the highest average prices at PHP 161,906 per sqm, while those in Makati CBD had an average value of PHP 151,323.
Condo capital values in Fort Bonifacio were slightly lower at PHP 150,048 per sqm. Because of the softer outlook on the residential market, capital values may decline slightly over the next 12 months according to Colliers.
