Open spaces in a subdivision are beyond the commerce of man

In the Philippines, open spaces in a subdivision—such as parks, playgrounds, and roads—are typically beyond the commerce of man, meaning they cannot be sold or privately owned once they are designated as common areas.

Legal Basis:

1. Presidential Decree No. 957 (Subdivision and Condominium Buyers' Protective Decree)

   • Requires developers to allocate at least 30% of the total subdivision area for open spaces, roads, and other community facilities.

   • These open spaces are meant for public or homeowners' association (HOA) use and cannot be sold or used for commercial purposes.

2. Local Government Code of 1991 (Republic Act No. 7160)

   • Upon completion of the subdivision, the roads and open spaces must be turned over to the local government or the HOA for maintenance.

   • If turned over to the local government, these spaces become public domain and cannot be sold.

3. Revised Implementing Rules and Regulations of PD 957

   • Open spaces are considered part of the subdivision’s amenities and should not be converted for private or commercial use unless properly reclassified by authorities.

     
     

Exceptions:

• In some cases, developers or HOAs may petition the Housing and Land Use Regulatory Board (HLURB, now DHSUD) or the local government unit (LGU) for reclassification. If approved, these open spaces might be used differently (e.g., converted into commercial property), but this is rare and subject to strict legal processes.

  
  

Source: Ziggurat Real Estate.

PH ranks 2nd in branded residences market share

The Philippines ranks second only to Thailand among Asia's branded residences market, according to hospitality consulting group C9 Hotelwork's latest report.

Despite a sluggish pace in international tourism, the Philippines' supply value of global luxury residence brands totaled $4.6 billion in December 2024, driven by economic growth in Metro Manila, Cebu, Boracay, Davao, Palawan and Bohol.

Published on Monday, the report showed Thailand having the highest market share at 23.3 percent, the Philippines at 17.3 percent, and South Korea at 11.6 percent.

The total supply value in the region was $26.6 billion across 68,001 units.Malaysia, Vietnam and India collectively accounted for 24.5 percent of total market share.

Market value

In terms of market value, the Philippines was likewise in second at $4.6 billion — attributed to growing urban and leisure destinations, led by Metro Manila with 18 properties and 6,246 units.

The branded residences market has traditionally served the domestic and overseas Filipino workers (OFW) segments, but this has changed with elite, non-traditional hospitality brands establishing their presence for the first time.

C9 Hotelworks Managing Director Bill Barnett said the influx of new global branded residences makes the Philippine real estate market more appealing to overseas buyers.

"Given the current domestic slump, more diversity is needed versus relying purely on the domestic and OFW markets," Barnett pointed out, citing Thailand's success with ultra-luxury projects.

Branded real estate in Thailand has usually been led by resort markets. But brands such as Porsche Design Tower Bangkok entered in 2024, commanding prices of $30,000 per square meter (sqm) and injecting new energy into the urban market. "Bangkok, like Miami and Dubai, is a playground city for wealthy collectors of unique real estate products.

There is no reason why Manila could not also become a global playground city, given its regional access, entertainment, sports, gaming and lifestyle," Barnett said. The Ascott Limited, meanwhile, expressed optimism on the sector's future, highlighting the strength of its brands over time.

"We are fully committed to the Philippines in the long term and believe the strengths of our brands — led by Somerset, Citadines and Oakwood — will add confidence and services required by buyers of internationally branded residences," Ascott Limited vice president for business development Saowarin Chanprakaisi said.

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Source: Manila Times

Developers unable to adjust condo prices as costs remain high

Property Developers in Metro Manila are unable to adjust condominium prices as inflation and supply chain issues keep costs high, according to real estate services firm Cushman & Wakefield.

“Developers are grappling with increased input costs due to persistent global inflation and supply chain issues, exacerbated by geopolitical tensions. These factors hinder their ability to adjust prices quickly, leading to slower sales and impacting revenues,” Claro dG. Cordero, Jr., director and head of research, said in a statement.

The mid-end segment faces a supply-demand mismatch, mainly driven by elevated condominium prices. Buyers also prefer larger units, while available studio types are often less than 25 square meters (sq.m).

Condominium prices dropped by 9.4% year on year, reversing the 8.3% increase recorded last year and the 10.6% rise in the previous quarter, according to the latest data from the Philippine central bank.

“Until a balance is achieved between buyers’ expectations and developers’ pricing, excess inventory in the mid-end residential condominium sector will persist,” Mr. Cordero said.

The Metro Manila market has a total supply of 450,000 mid- and high-end condominium units, with around 8% remaining unsold.

Before the pandemic, the annual average completion rate for residential condominiums was 35,000 units. Over the past five years, it has declined to 25,000 units.

Outside Metro Manila, unsold inventory is lower at 5%, with about 250,000 completed units.

Dominant locations include Metro Cebu at 54%, followed by the Cavite-Laguna-Batangas corridor (24%), Metro Davao (13%), and Metro Iloilo (3%).

In the Metro Manila office market, vacancy rates are expected to stabilize at around 17–18% in 2025, Cushman & Wakefield said.

“Despite the return of office space from POGO (Philippine offshore gaming operators) companies, absorption rates have improved from pandemic lows but remain influenced by flexible work trends and corporate policies. On the other hand, some companies mandating a return to the office are positively impacting demand growth,” it said.

In central business districts (CBDs), average office rentals have declined by 2.9% annually, while rental rates in non-CBDs fell by 4.2%.

“This trend reflects a continued flight to quality, with CBD office developments benefiting from their superior finishes, amenities, and tenant mix,” Cushman & Wakefield said.

It also noted the rise of office spaces in non-CBDs, with 2.9 million sq.m. added outside Makati and Bonifacio Global City in the past decade. This was driven by flexible work trends and developments outside CBDs.

For retail, the property consultant noted an increase in redevelopments of existing spaces, incorporating additional features to enhance the shopping experience. Mid-end and high-end shopping malls have an average annual supply of about 376,000 sq.m., Cushman & Wakefield reported.

In the hotel segment, Cushman & Wakefield cited uneven regional recovery due to the untapped potential of many tourist destinations. It expects 1,600 additional keys in the mid-end and higher-end hotel and serviced residence segments this year.

However, it may take five years to reach the projected 70,000 keys due to construction delays.

Meanwhile, Cushman & Wakefield highlighted rising demand in the logistics and industrial sub-sector, driven by the growth of the digital economy.

However, it emphasized the need to improve the quality of logistics facilities to meet the demands of new occupiers. Challenges in the sector include achieving sustainability targets, clarifying restrictions related to data privacy laws, and addressing the high costs, availability, and viability of support utilities.

“Across all key Philippine real estate sub-sectors, the increased demand for higher-quality, well-located, and resilient developments is significantly shaping the future real estate landscape,” Mr. Cordero said. “Investors and tenants prioritize properties in prime locations with superior amenities and robust infrastructure.”

Source: Manila Times