Manila building boom may lead to a glut

Manila

PHILIPPINE developers are on a tear. The capital Manila is in the grip of a building boom, led by developers such as Megaworld Corp and Ayala Land Inc, that will add a record number of apartments over the next two years. It also threatens to lead to a glut that will weigh on returns for investors.

An estimated 55,000 residential units will come onto the market in Metro Manila this year, slowing growth in lease rates, according to broker CBRE Group Inc. Spending by property companies will rise 18 per cent to more than 300 billion pesos (S$9.4 billion) in 2015 from last year, according to broker Savills plc.

Philippine developers have been on a building spree as the nation's biggest economic boom since the 1950s and rising remittances from Filipinos working abroad spur home purchases. The market may need more time to…