Philippine Apart-Hotels or Condotels as Investment Properties
Below is a MRR and PLR article in category Finance -> subcategory Investing.
Philippine Apart-Hotels or Condotels as Prime Investment Opportunities
Summary
The Lancaster brand of apart-hotels or condotels is emerging as a prime real estate investment opportunity in the Philippines.Article
In the Philippines, condos are not only more affordable and easier to maintain than single-family homes, but they've also become a highly sought-after investment in the real estate sector. Beth Collingz, International Sales Director at PLC International, highlights this trend, noting that the best is yet to come for condo investments, especially through the Lancaster brand of condotels marketed by Pacific Concord Properties Inc.
Over the years, property values for mid-market condos in Metro Manila have surged by 120% since 2000, averaging an annual growth rate of 17.14%. In contrast, new homes have increased by only 25% during the same period, equating to an annual growth of 3.57%, while resale homes have climbed 20%, or 2.85% annually. In 2007, the median price for a studio-type condo in Metro Manila was around $53,000, which marked a 55% increase from 2005. Meanwhile, mid-range housing prices saw a lesser rise, moving from $84,000 in 2005 to $90,000 in 2007.
Demand for condos, hotels, rental accommodations, and commercial spaces in the Philippines is rising, driven by a growing population of nearly 80 million and the return of over 10 million overseas Filipino Baby Boomers. In Metro Manila, residential rents surged by 26% in early 2007, marking the highest increase in over a decade. This trend also aligns with the expansion of IT companies such as Texas Instruments, which invested $1 billion in the Philippines. High-end rents rose by 13% from the previous year.
Collingz predicts that rents in the region could increase by at least 8.7% per annum over the next five years, compared to 3.3% in the U.S. and 3.7% in Europe. Return on investment (ROI) for rental properties could range from 8% to as high as 14-16%, contrasting with the 4-5% typically seen in the U.S. and Europe.
These dynamics make condotel investments in the Philippines highly appealing. Collingz notes a shift in investment flows toward Asia, resulting in a surge of interest in markets with burgeoning opportunities. In places like Singapore, private real estate funds have snapped up significant properties, paralleled by activity in Hong Kong with acquisitions from major players such as Morgan Stanley.
As markets in Singapore, Japan, and Hong Kong become saturated, the Philippines is poised to attract significant overseas investments. Affordable prices and spending by retirees are also drawing attention to the country's residential condominium hotels, spurring further construction. This interest is fueled by competitive pricing compared to markets like Europe, along with flexible payment plans for condotel developments. Buyers benefit from rental incomes with projected ROIs of 8% to 16%, depending on purchase terms.
Metro Manila stands out as a favored destination for international buyers and investors due to its appeal as a year-round vacation and business hub. The Lancaster Atrium Condotel developments by Pacific Concord Properties on Shaw Boulevard exemplify this potential.
Accessibility is another advantage. Flights from London to Manila take around 16 hours, with frequent airline specials enhancing the area's international appeal. Unlike other regions where rental markets are seasonal, the Philippines offers a robust year-round rental market. This consistency provides property owners greater flexibility in planning usage and rental, backed by an array of professional property managers and rental agents, simplifying ownership and leasing processes. The Lancaster Condo Hotel Developments cater to these needs perfectly.
Lancaster Manila Atrium Tower A offers full-service condominium hotel accommodations with studio, one-, two-, and three-bedroom suites available for purchase. Set for completion in December 2010, the Lancaster Suites Manila Atrium Tower II will allow unit owners to enroll in the Lancaster Condotel Rental Pool, generating rental income when not in use.
With rising condo prices, a scarcity of affordable rental properties, and significant increases in rental rates, Lancaster Suites Manila presents one of the hottest investment opportunities in the Philippines.
Beth Collingz
PLC International Marketing Networks
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