Tuesday, June 07, 2011

UK, Cayman and Bermuda Investment Fund Managers tap their deep pockets to purchase real estate investments in the Philippine Condotel Market

UK, Cayman and Bermuda Investment Fund Managers tap their deep pockets to purchase real estate investments in the Philippine Condotel market amid shortage of Hotel rooms driving expected ROI through Guaranteed rental returns upwards of 6% per annum

Private equity units of offshore banks and investment clubs [REIT’s], driven in part by the current weakening of the US Dollar in international trading, are being attracted by returns in the Philippines as much as double those in the United States and Europe, are purchasing significant blocks of real estate for private investment trusts in the Asian commercial property sectors.

"Despite the global economic crisis, rents which we thought we would get in two years we're getting now," said Beth Collingz, a managing director in Metro Manila of the Condotel Marketing arm of PLC Global Pinoy, the International marketing partner of Pacific Concord Properties’ Lancaster Brand of Condo Hotels in the Philippines.

Collingz expects rental income to rise another 15 percent in the coming 18 months after gains of as much as 20 percent since January 2010, when Pacific Concord Properties Inc are set to launch Condo Hotel operations of the second phase of their flagship Lancaster Suites located in the Ortigas business district in Metro Manila.

"There are large amounts of capital now chasing increasingly limited investment-grade real-estate opportunities in Asia," said Collingz. "We are currently in the closing stages of packaging the investment of some $60M in private-equity real estate [REIT] funds for new Lancaster Brand Apart-Hotel or Condotel buy-to-let developments in Metro Manila and Cebu, on the strength of expected rental returns which will continue to grow at a rapid pace."

With funds raised for commercial property deals in Asia having doubled in each of the past five years, Collingz sees the market value of Condotel investments in the Philippines reaching new heights in 2011/12 as more developments come on line and investors shift from high priced real estate to low entry property markets in South East Asia.

Rising demand for homes, hotels, short and medium term rental accommodation, offices and shopping malls in the Philippines, home to a population of almost 100 million and with a significant number of the more than 10 million returning overseas Filipino ‘Baby Boomers’, is fueling rents.

Residential rents in Metro Manila rose 15 percent in the three months to March 2011, their highest quarter-on-quarter increase since the Global economic crisis, as more and more IT companies set up shop in the Philippines. High-end rents rose some 23 percent from a year earlier, said Collingz.

Collingz projects that Rents in the region are set to effectively jump up by at least 14.7 percent per annum over the next five years, compared with negative returns in the recession hit United States and European property markets. Yields from 6 percent to as high as 8 percent ROI on rental income property contrast with the 3 percent to 4 percent that private equity firms get in the United States and Europe.

"People are in general looking to shift fund flows relatively towards Asia," Collingz said. "As Singapore and Hong Kong markets become saturated, the Philippines will be the next real estate market to attract substantial overseas investments. Lower prices and retirees’ spending money are also directing foreign attention to residential condominium hotels in the Philippines, which in turn is driving up more construction.

“A lot of this interest is being driven by the relatively cheap market prices here compared to Europe – especially UK housing prices – and the easy payment options available for condominium hotel developments” Collingz said. “The buyers gain rental incomes that on today’s purchase prices give a projected ROI of some 6 percent to 8 percent depending on the mode of payment for the unit. Lancaster – The Atrium Manila is offering a 5 year Guaranteed Rental Income of 6% to condotel buyers she said.

For further info on Philippine Condo Hotel Investment opportunities please do not hesitate to contact us:

Beth Collingz
PLC International Marketing Networks
Pacific Concord Properties Inc.,
Manila Head Office
Shaw Boulevard, Mandaluyong City.
Metro Manila. Philippines

Pacific Concord Properties Inc.,
Cebu Branch Office
Lapu-Lapu City, Mactan.
Cebu. Philippines
Phone: Cebu [6332] 340 0721
EMail: plcsales@pldtdsl.net
Web: http://www.lancastersuites.com/ [Lancaster Condotels]
Web: http://www.condotel-manila.com/ [Lancaster Suites]
Web: http://www.condotel-sales.com/ [Lancaster Atrium]

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