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Oct 21, 2016

Philippines: rental yields in Manila range from good to excellent


Last Updated: Oct. 21, 2016
METRO MANILA -
Condos
COST (US$) YIELD (p.a.) PRICE/SQ.M. (US$)
TO BUY MONTHLY RENT TO BUY MONTHLY RENT
45 sq. m. 131,310 767 7.01% 2,918 17.04
80 sq. m. 268,480 1,602 7.16% 3,356 20.03
150 sq. m. 574,650 3,366 7.03% 3,831 22.44
EASTWOOD CITY - Condos
50 sq. m. 98,850 611 7.41% 1,977 12.21
LEGASPI VILLAGE - Condos
40 sq. m. 134,360 827 7.38% 3,359 20.67
70 sq. m. 239,050 1,521 7.64% 3,415 21.73
120 sq. m. 474,240 2,422 6.13% 3,952 20.18
ORTIGAS CENTER - Condos
50 sq. m. 107,850 801 8.91% 2,157 16.01
ROCKWELL CENTER - Condos
50 sq. m. 211,800 1,127 6.39% 4,236 22.54
120 sq. m. 494,160 2,518 6.11% 4,118 20.98
SALCEDO VILLAGE - Condos
40 sq. m. 113,760 696 7.35% 2,844 17.41
75 sq. m. 203,925 1,103 6.49% 2,719 14.70
150 sq. m. 365,550 2,232 7.33% 2,437 14.88
Districts researched
Eastwood City , Makati CBD, Ortigas CBD, Rockwell, Global City-The Fort
Source: Global Property Guide Definitions: Data FAQ See also: Update Schedule

Yields in Metro Manila are exceptional, by international standards. 

However transaction taxes (known as ‘capital gains taxes´, but not actually such), and (if observed) official income tax rates applicable to non-resident investors, are high. You may think that it will be easy to avoid these taxes, it being the Philippines.  But it ain´t necessarily so.  Once the local authorities have their eye on you, they won´t willingly let go. Plus, the sheer bureaucracy of actually paying can be irritating.

Buying prices for condominiums are from US$2,800 to US$4,200 per square metre, considerably up on previous years. Unusually, yields are not always highest on the very smallest units, which suggests that smaller condominiums are oversupplied. It therefore makes a lot of sense to get a larger unit, since the general management cost and hassle of a larger unit is less.

The highest-yielding units that we found are 50 square metre units in Ortigas (which have gross rental yields of nearly 9%). Great! We don´t have enough information to know whether these high yields apply in Ortigas to other apartment sizes.

The year before last we found that yields were surprisingly good generally on very large condominiums in Metro Manila (250 square metres), at around 9%, but this year we were not able to assemble a database of this dimension. This may be an optimal size for investment.






Comments

#1 DAN | June 29, 2010

The Philippine market actually has levels of diferent markets.In the condo market, the hot items are the flat condo units selling at 1.3 to 1.8M no evat taxes cause its below the 2.5 range. you go above 2.5 and you will have to pay 12% more. SM development is leading in this segment. The condos are well located and in the city proper. The bi level units are a hit too. 1.5 to 2.4M unfinish units. meaning you will finish the intrior of the condo. These project are all within the city limits making it easy for you to comute arounfd the city in a few minutes or so.

#2 JUN VILLANUEVA | January 02, 2012

P1.8M to P2.5M units is too small but anyways, will see how can I re design the space of 18 to 25 sqms.

#3 YASH | May 26, 2014

May I know who did the rental yield survey of Philippines ???? and for what area or for what projects ?

If is it for Makati CBD or Fort or Rockwell its wrong on all location maximum rental yield is between 5.15% - 6%. Which your website showing is not possible for any part CBD of Metro Manila. Even not possible for any project of any developer. Condos older than 5 years in Makati maximum gross rental is 485 per sqm and after Taxes, Association Dues its around only 341 per sqm. I own condos in all CBDs in Metro manila and all kinds new as well old.

#4 KRISTOF | November 02, 2015

Hi Yash

Can you please elaborate on the above?

Has anything changed since?

I also feel those yields are way too high.

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