Joint Venture Projects and What Makes Them Lucrative to Investors

The local real estate industry is not a stranger to partnerships between company powerhouses. Combining the expertise of unique brands, real estate projects often capture international attention. But what exactly is the appeal of joint venture developments? More importantly, what qualifies them as investment-worthy? These are the questions tackled in Lamudi’s latest webinar.

The online event featured Lee Chee Hoe, Country Representative of Hongkong Land Philippines, and Joey Bondoc, Associate Director of the Research Division of Colliers Philippines. Here are the highlights of the show:

How Joint Venture Projects Attract the Market

Since 1996, Hongkong Land has been operating in the Philippines and tying up with various local companies. Throughout the years, they have seen satisfied buyers and partners.

On the success of developments, Lee said, “I believe these buyers have trust in our brand, confident in the quality they can expect from our projects. The concepts of the projects we introduce are different from what people are used to seeing in the market.”

Bondoc noted the popularity of joint venture projects, saying that it has enjoyed a stable demand in recent years. Aside from the upscale amenities, he observed that Filipino buyers enjoy the fact that foreign developments are being offered locally.

He added that the architectural designs, as well as precise construction and engineering standards, are factors that prompt local investors to acquire properties from joint venture projects.

What Makes Joint Developments Lucrative

The strategic location is one of the factors that make joint developments lucrative, according to Bondoc. The projects are mostly in major business districts in Metro Manila.

Lee agrees with Bondoc and adds that the collaboration of local and foreign real estate companies makes joint ventures investment-worthy. “The local knowledge of local companies combined with the foreign companies’ experience results in a different approach in developing the project, which will benefit all stakeholders.”

Why Luxury Projects Are Resilient

The Velaris Residences is one of the most recent joint venture projects of Hongkong Land in the country. A 45-story luxury condominium, the development is in partnership with real estate giant Robinsons Land Corporation. According to Lee, they adopted the intentional design philosophy in the project to promote the best experience for future residents.

Noting the resilience of the luxury real estate segment amid the pandemic, he said that the stable market demand stems from the need for spacious and low-density living, decent facilities, well-managed property, and strategic location. These elements are present in The Velaris Residences.

Bondoc emphasized the strategic location of luxury and upscale developments. “The rental prospect is there. The potential for capital appreciation or price increase is also there. They are near the infrastructure projects implemented by the government. They are within bustling business districts where you still have major outsourcing companies occupying office spaces,” he said.

Historically, luxury and upscale condominium developments have been flexing stable market demand during times of economic downturn, Bondoc added. He projects that this market segment will continue to become a major driver of residential appetite in the capital region. For this reason, it’s worth including joint venture projects in investment portfolios.

Why Invest in Joint Venture Projects

Despite the economic downturn brought about by the pandemic, Bondoc said that the growth prospects in the country remain promising. He believes that the local economy will grow at a much faster pace moving forward from the pandemic. The infrastructure program of the national government will contribute to this growth and recovery. With this, the Philippines will remain a viable property investment destination beyond 2021.

“We believe there will be pent-up demand in the market. That’s why the Philippines will continue to be attractive in the region,” Bondoc added.

Lee shares the same positive sentiment, emphasizing that the local economy is resilient, as it weathered the Asian financial crisis and subprime financial crisis. The highly literate population also creates a strong, robust market.

“With the economy growing again hopefully to pre-pandemic levels, we will see property values continue to appreciate again. Emerging business hubs, such as those along growth corridors, stand to benefit the most,” he said.

He added, “Property prices in the new growth areas, such as in Pasig and Quezon City, have not yet skyrocketed, thereby offering good upside potential for investors.”

What to Prioritize in Investment Properties

Both Lee and Bondoc shared what to consider when investing in joint venture projects. These are their recommendations:

  • Strategic location. The proximity of a residence to transportation hubs, commercial establishments, and essential services, such as hospitals and schools, makes for high-value properties, according to Lee. Properties along growth corridors will see better rental income and capital appreciation, he added. Bondoc agreed, saying that a good location is one that is not just within business districts, but also near infrastructure projects.
  • Work-from-home functionality. Lee added that investors see their condos not only as homes, but also as a place for work. Therefore, proper layout, ample space, and good ventilation and lighting are likewise important features. Similarly, a steady, reliable internet connection, according to Bondoc, is essential.
  • Leasing prospects. Bondoc urges investors to evaluate if the condo can be a passive income source once the project finishes construction.
  • Attractive payment terms. Even though the luxury market, the property segment most interested in joint venture projects, is shielded from the economic impact of the pandemic, attractive payment terms are still a big consideration to sustain holding power

Joint venture projects are popular for a reason. They deliver the quality investors look for, and more importantly, weather the economic crisis at hand. Include these projects in your investment portfolio.

As published in Lamudi Philippines on July 23, 2021