Feb 25, 20By Sam Morales

When thinking of investing real estate in the Philippines, popular locations to look up in are central business districts or CBDs. CBDs are quite popular as they are considered focal points of a city, and therefore have a high return on investment potential.

However, there are still some who show hesitation in investing in these locations, especially if it means investing big. We debunk the following concerns about investing real estate in a CBD.

1. Are the properties there expensive?

CBD properties are often perceived as expensive and hard to attain. Aside from it being marketed as a “postcard” location, the number of tall prospective properties, abundant transportation accessibility and high density, one will think that you need to invest big in order to buy or rent a condo in such a “prime” location.

But the CBD is about perception, and a CBD is often defined by what people visually think of where Bonifacio Global City or Ayala Business District starts and ends, which is usually a cluster of tall buildings, urban activity, and lack of parking.

From a real estate investment perspective, CBD properties are expected to fetch a higher price because they are located on Peak Land Value Intersection. Peak Land Value Intersection is the intersection in the city with the most valuable real estate. Developers who build and develop real estate located in a Peak Land Value Intersection rarely leave room for parking areas and instead focus on vertical projects like skyscrapers to optimize land use.

2. Does a CBD property come in with expensive real estate tax and other fees?

The notion of CBD properties being sold or rented at high prices also comes with the assumption that investors will also need to shell out high for real estate taxes and other fees. However, local government units are making efforts to make real estate investments in CBDs achievable. For example, some cities offer tax discounts of up to 20% to those who pay before the prescribed deadlines. Association fees might be higher than normal because future tenants and property owners will then be subscribed to property management systems such as building maintenance, security, mailing, and even garbage disposal and recycling

3. Is the cost of living in CBD quite expensive?

While CBDs are renowned for their cultural and entertainment hotspots, there is the perception that you need a lot of money to actually live in BGC or Makati, for example.

It may seem it but the number of working-class professionals in CBDs opened opportunities for entrepreneurs to establish affordable entertainment, dining, and shopping options. Affordable hole-in-the-walls and convenience stores are saving graces for professionals who are on a daily budget. Fast food restaurants like McDonald's, Jollibee and KFC are also transforming as places where professionals can conduct meetings. In residential condominium buildings, specialty grocery stores and small restaurants are just a few floors down.

Moreover, commuting around the CBD is surprisingly affordable. Most CBDs have pedestrian systems that would allow people to walk to and from their homes or offices simply by walking. CBDs also have great public transport systems that are situated in strategic locations. 

4. Are CBDs family-friendly?

Recently, a steady rise in CBDs located in edge cities has been observed. Edge cities are defined as sizable urban locations that are largely retail or shopping-focused and have more jobs than homes. But development in edge cities now have more emphasis on lifestyle development to encourage not only residents but visitors to spend time, and of course, spend their tourist dollars in. Bonifacio Global City, for example, is attracting outsiders daily not just for their shopping malls but also for family-friendly hotspots like art exhibits, food festivals, dance and music competitions, free movie screenings and lifestyle parties. 

5. Can live in a CBD for that long?

If you are planning to invest in a condo, a serviced residence, or an estate in a CBD for your future home, perhaps a better question is this: what aspects of your lifestyle are the most important for you?

If job opportunities, convenience, and recreational diversity are for you, then living in a CBD location should be your choice. This appeared to be the consensus of around 5,000 new homeowners back in 2017 according to this report about Barangay Ususan’s population.

Looking for property recommendations in a central business district? Start your search here at www.signetproperties.ph