Published - A branded life high over Manila

Trump Tower Manila - The Swimming Pool
Versace, Missoni, and Trump are some of the international brands to have recently licensed their names for use with luxury residential properties being developed in Manila, underlining the continuing demand for branded high-end properties that started with the introduction of the Raffles Residences Makati in 2007.
The country’s luxury residential market has been picking up in recent years, thanks to a strong economic recovery  and increasing demand for rental properties in the capital’s business district as  more multinationals have opened offices. 

As for the allure of well-known  names, the 2008 Nielsen Global Luxury  Brands Study  ranked Filipinos as the  third most brand-conscious population  in Asia, a region led by India’s thirst for  brands, and ranked eighth globally. The  Nielsen survey found Filipino consumers were the most receptive to the  idea of designer-branded goods, like  mobile phones, laptops and flat screen  TVs, and favored brands like Gucci and  Louis Vuitton.

Hammam at the Milano Residences

Century Properties is building the 53-story Milano Residences, where all public areas will be designed and furnished by Versace Home. The project is scheduled to be completed in 2015 but 80 percent of the units have been sold since the project was introduced in December.

The Filipino property developer also recently announced two new branded residential projects, the $150-million Trump Tower Manila and a tower that is not yet named but will be completed with Missoni Home, a first in the residential sector for the Italian fashion brand.

The Library at the Milano Residences

Robbie R. Antonio, managing director  at Century Properties Group, says the  strong reception for the Milano Residences encouraged the company to pursue the other branded projects.

The Raffles Residences Makati, which  is expected to be completed next year  and will share amenities with the Fairmont Hotel, is leading the high-end residential property market in Manila with a  current price of $4,600 per square meter.

Brad Berry, vice president real estate  at the Dubai-based Kingdom Hotel Investments, which is developing the  Raffles project with Ayala Land, says  more than 80 percent of the project’s  residences have been sold  — and that  prices have increased on average by 11  percent since the initial introduction,  with most of what he called the ‘‘price  pressure’’ on the one-bedroom units.
‘‘There is a strong investment play on  branded residential, when the offering  is supported by an active operating residential brand,’’ he explained. Buyers at  the Raffles project can have the hotel arrange rentals when they are not using  their properties.

Claro Cordero, head of research, consulting and valuation at the Jones Lang  LaSalle real estate agency in Manila, estimates that, after a decline of 7 percent  in 2009, prices in the city’s luxury residential market recovered by as much as  14 percent in 2010 and could rise another  10 percent this year.

Mr. Cordero estimates there are  about 3,700 completed units that are  considered luxury residences in Metro  Manila, with about 80 percent concentrated within the Makati central business district. ‘‘For existing luxury developments, the average selling price is  approximately $2,950 per square meter,  while several upcoming developments  are selling at between $3,500 and $4,240  per square meter,’’ he said.

Units at Milano Residences, which  range from 40 square meters to 400  square meters, started selling at $2,830  per square meter in December and now  are averaging $3,184 per square meter, a  12 percent increase, Mr. Antonio said.

The 55-story Trump Tower Manila, to  be completed in 2016, will have 220 units  and is set to be one of the capital’s priciest with pre-launch prices at $3,860 to  $3,980 per square meter. The 40-story  Missoni project, which will be officially  introduced in December and should be  completed in 2016, will be a smaller project, with units ranging from  25 square  meters to 200 square meters, and a starting price of $2,840 per square meters.

So far the majority of buyers in these  luxury condominium developments are  Filipinos, either living in the country or  overseas and seeking either pied-a- terres or investment properties, Mr.  Cordero said.

According to a 2010 report by the  Washington-based Urban Land Institute and PricewaterhouseCoopers, international real estate investors do not  particularly favor Manila. However,  within the five real estate investment  categories of retail, office, hotels, industrial and residential, residential apartments with the possibility of rental was  seen as the best buy.

Mr. Berry said that while overseas  and local Filipinos have been driving  the market, ‘‘overseas buyers that understand the Manila market can see the  upside potential. Obviously that’s why  we’ve invested in this market as well.’’

More than 30 percent of the buyers at  Milano Residences are from Singapore,  Mr. Antonio noted, saying the attributes  the interest to their being ‘‘very familiar  with the brand and they know what Versace stands for.’’

This story was published in the International Herald Tribune on October 14