BY JENNEE GRACE U. RUBRICO, Senior Reporter
Residential projects moving to ‘cocooning’
The residential property development sector is moving towards cocooning with uniqueness, accessibility, and affordability as impetus, an official of a property research firm said.
Eastwood city in Libis, Quezon City: cocooning concept in the works
In an interview, Richard T. Raymundo, director for the research and consultancy division of Colliers International Philippines, Inc., told BusinessWorld that this trend will continue to be seen in the near term.
Cocooning, or building residential projects near business areas, Mr. Raymundo said, is hinged on the concept that residents integrate their lives in a "work-live-play" environment.
"They are now trying to package things with a work-live-play environment... You could be working in a call center and living in a studio [in the same area] and then if you’re hungry, just go down to your [a fastfood outlet], or whatever. They try to contain things," he said.
Mr. Raymundo said connecting residential and business areas fits the amenities concept, which is a differentiating mark from other developments. "They are trying to introduce something new in the market, and they try to set it apart with that."
Property developers, by adopting the setup, also get a captured market for retail ventures. "Technically it is a cocoon. You have your retail already there and the retail [could] even [be] connected by an underground walkway tunnel to the residential. Most of the residential [developments] right now would have a retail podium," he said.
Mr. Raymundo said Rockwell Land, Inc., Federal Land, Inc., Ayala Land, Inc., and Megaworld have adopted such a development concept.
He said cocooning can also work outside the business districts "given the right size of the retail component."
"Eastwood was not a business district before. The residential component still far outpaces the office segment. But it’s there. It’s a small retail," he said.
Another driving force for residential property development is affordability, Mr. Raymundo said.
"I think the theme is still for most part affordability. Condominiums that are moving right now are the ones that address affordability concerns," he said. These are those that have studio types and one-bedroom units.
He said even high-end condominiums, which are selling mainly because there is a dearth in supply, have become more affordable than they used to be because they are now smaller.
"The luxury segment in the past cycle versus what we have right now is totally different in terms of size. Back then you’d see a three-bed-room [unit] will be 300 square meters. Right now, a three-bed-room [unit] would be 150 to 200 square meters. So, in that sense, you still see that they are still addressing affordability issues," he said.
Mr. Raymundo said smaller luxury condominium units are "what the market needs right now."
Meanwhile, another driving force for residential developments would be accessibility, with many developers looking at areas beside stations of the Metro Rail Transit (MRT) along the Epifanio de los Santos Ave. (EDSA) as project sites.
"You see a lot of residential condominiums situated near MRT stations. That would be the next thing wherein from the condo unit you take the train going to work. Like Pioneer Gateway, you will have a series of residential condos there. Those are the things to watch out for," he said.
Mr. Raymundo said among the available properties are the lot in front of GMA 7 along EDSA, which will be developed by the Social Security System, and the Boni Serrano, Shaw Boulevard, and EDSA Central areas.
Offering "unique propositions" is also a trend in the property development sector given the stiff competition, Mr. Raymundo said.
For the residential projects, he said, developers have started offering units with lofts, as well as bi-level units in vertical developments.
He also said that uniqueness is also being taken into consideration in the leisure market, which, while still down, has already started showing signs of recovery.
"They have to offer something different, something unique for people to buy into a leisure development," Mr. Raymundo said.
For instance, the sale of farm lots and seaside residences are doing well, Mr. Raymundo said.
"These farm lots, technically, they’re residential. But if you think about it, it’s leisure. You don’t live there, it’s a secondary home. They go there on the weekend and ‘farm’ and it’s leisure. But they were able to put a new spin and create a new segment and depending on location, it works.
"Or seaside residential [projects like] Punta Fuego [in Nasugbu, Batangas], they’re unique. Those aren’t cheap but they’re selling. I guess it has to have a unique proposition," he said.
Mr. Raymundo said that overall, the property development sector will continue to grow, with office space rentals continually going up due to demand from business process outsourcing and call centers, and lack of space.
Retail, meanwhile, will continue to be driven by the economy and consumer spending, with malls looking at provincial markets as their new targets given that the segment may have reached saturation levels in some areas in Metro Manila, particularly along EDSA, he added.
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