Century City, Makati - a place to watch
CPG could be the stock to watch.
I think problems renting Knightsbridge, Gramercy, and other projects at Century City,
could potentially trigger a slide in resale/secondhand prices, at projects on the Fringe of the CBD
"It is the reason why Century Properties PH share price is not doing very well -- but they've understood it and they are going
to concentrate on the lower end of the market now as well." - see Bangkok, TH thread
CHART: Century Property, in Makati, PH
I see it differently.
Century has built an expensive product, in the WRONG location - they are in Makati's old "red light district"
The high-paying jobs are in the CBD. To get to the CBD, residents in Century City will need to walk around Bel Air Village, the Western part.
Imagine it rains, what is going to happen?
Are they going to have a very long wait for cabs? Or will they have to get wet walking around Bel Air Village,
Another problem is this:
The public areas of the buildings (Knightsbridge & Gramercy - not sure yet about Trump Tower),
are nice, but the flats themselves are not great. I am told the "walls are particle board, not concrete", and so it
is very noisy for residents.
As a result, Knightsbridge and Gramercy are renting at under P 1000 psm, probably below expectations of owners
From OLX: Knightsbridge Flats for Rent
P 24,000 / 27 SM = P 889 psm (F.Furn.)
P 26,000 / 27 SM = P 963 psm (F.Furn.)
P 28,000 / 30 SM = P 933 psm (F.Furn + Wifi)
P 29,000 / 30?sm = P 967 psm (F.Furn + Wifi)
Others available at P 30,000, and higher
From OLX: Gramercy Flats for Rent
P 27,000 / 27 SM = P1000 psm (F.Furn.)
P 29,999 / 30 SM = P1000 psm (F.Furn.)
P 38,000 / 46 SM = P 826 psm (F.Furn.)
Other 1BR flats at P 40,000, and higher
I am seeing Flats for Sale at prices like these: (resales?)
Kn. : P 3900k/27=144k, P 4000k/27=148k, P6000k/33=181k, say P150k psm
Gr. : P 4000k/26.5=151k, P 5500k/39=141k, say P146k psm
P950 x12 = 11.4/ 150k = 7.6% Gross yield, which is not far from the levels Colliers reports for Makati CBD
If I am right, the rents will slide, or at least drift lower, and that will undermine property prices