MANILA - Sweating under their hard hats, renowned Polish architect David Libeskind and interior designers from Italy's Armani trooped to a construction site in sweltering, downtown Manila, to perform the ground breaking for a new tower in the Philippine capital.
Marketed to attract buyers wealthy enough to own luxury apartments, most likely in more than one country, the 60-storey office and residential project, dubbed "Century Spire", is being built in the downtown Makati district.
Featuring an angular glass shaft with an asymmetrical triple summit, the "Spire" is due to be completed in four years, but two-thirds of the space is already sold, with many of the apartments taken by rich Asians living elsewhere in the region.
At the ground breaking ceremony in May, Libeskind - whose other landmark buildings include the Jewish Museum in Berlin and the Denver Art Museum - said the "Spire" would "make a bold and optimistic statement about the future of the Philippines."
Manila's changing skyline reflects the Philippines's increasing wealth, with many similarly stylised high-rises sprouting up across the capital of a country that was once regarded as one of the region's economic basket cases.
Yield-hungry investors from Malaysia to Japan now buy Philippine condominium space in bulk, rotating money from favourites Hong Kong and Singapore as the authorities there have acted to cool real estate prices, property managers and consultants said. "There has never been this strong foreign interest in the Philippines," said David Young, Philippines managing director with consultancy and brokerage Colliers International.
Typically, 40 per cent of space in newer condominiums is owned by foreigners, the maximum they are allowed. Foreigners cannot own land in the Philippines, but they are allowed to hold condominium titles as long as 60 per cent of the development's total floor area is owned by Filipinos.
"The fact that you have all these developers maximising the foreign limit is becoming very common," said David Leechiu, Philippines country manager with property manager and advisory Jones Lang LaSalle Inc.
He said foreigners buy into Manila's gleaming new towers for capital gains, or to rent to a growing Filipino middle class and expatriate population.
Rising prices and the influx of foreign money have sowed fears of an asset bubble, but there are no signs of a slowdown. Real estate prices are still below rates seen before the global financial crisis despite a steady increase, brokers say.
Manila's condominiums offer yields between seven to nine per cent, nearly double those in most other Asian cities, a premium seen lasting for at least five more years, brokers say.
A report by the US-based Urban Land Institute and PricewaterhouseCoopers ranked Manila as fourth best in Asia-Pacific for property investments this year after Tokyo, Shanghai and Jakarta, saying operating cash flow returns in the Philippine capital could be in the mid-teens.
Rich Singaporeans, Chinese, Japanese, Koreans and Malaysians bought the most condominiums among foreigners in the past 18 months, officials from developers Ayala Land, Megaworld, and Century Properties Group told Reuters.
"Purchase levels can go from one unit to a couple of floors," said Jaime Ayala, chief finance officer at Ayala Land.
Jericho Go, first vice president with Megaworld, said foreigners "buy residential condominium units in bulk, while others group together and pool funds to buy a tower in a development." Aided by strong foreign demand, domestic developers have enjoyed bumper sales in recent quarters.