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Over recent years, operational real estate has emerged as an increasingly compelling asset class for investors worldwide. Defined by the active management and operation of properties to generate income, this investment strategy transcends the simple ownership and leasing model and aims to add value through efficient operations. Let’s delve into the world of operational real estate in the context of the Philippine real estate market.

Operational Real Estate: A Brief Overview

Before we focus on the specifics of the Philippines, it’s crucial to understand what operational real estate entails. It refers to properties where the ability to generate income goes beyond the physical asset—such properties need active, hands-on management and the day-to-day operations have a substantial impact on the asset’s overall performance.

This asset class includes hotels, senior living facilities, student housing, self-storage facilities, co-working spaces, and multi-family residential rentals. These “asset heavy” investments require a greater emphasis on operations to enhance the user experience and, in turn, increase profitability.

The Philippine Market: An Untapped Opportunity

The Philippine real estate market provides a diverse range of opportunities for operational real estate. Amid urbanization, a growing middle class, and strong demographic fundamentals, there’s a significant potential for strategic operational real estate investments.

1. Hotels and Resorts

With its rich culture and scenic landscapes, the Philippines is a major tourist destination. After a downturn caused by the COVID-19 pandemic, the hospitality industry is poised for recovery, presenting potential opportunities. Operational strategies in this sector could include optimizing food and beverage offerings, enhancing guest services, and capitalizing on event spaces.

2. Senior Living Facilities

The need for senior living facilities in the Philippines is rising as the population ages. These facilities are more than residential buildings—they offer services like medical care, meals, and housekeeping. Given the cultural emphasis on caring for elders, well-operated senior living facilities could fill a growing need and provide substantial returns.

3. Student Housing

As a country with a youthful demographic and a high regard for education, student housing in the Philippines offers an attractive investment opportunity. Purpose-built student housing, offering amenities like security, maintenance, and internet access, can cater to the rising demand for high-quality student accommodation.

4. Co-Working Spaces

The flexible workspace sector is booming in the Philippines, driven by the burgeoning start-up ecosystem, freelance economy, and the trend of remote working. Co-working spaces offering not just a desk but a suite of services – like utilities, common area maintenance, and reception services – present an appealing operational real estate opportunity.

The Future of Operational Real Estate in the Philippines

With its diverse real estate landscape and promising economic growth, the Philippines presents numerous opportunities for operational real estate investments. But, it’s essential to remember that this is an asset-heavy investment requiring active, hands-on management.

The potential for higher returns is definitely present, but it also comes with its own set of risks and challenges. Therefore, it’s essential to conduct thorough due diligence, understand the market dynamics, and, where possible, partner with local experts to ensure successful investments.

If you’re interested in exploring these opportunities and seeking to invest in the operational real estate sector in the Philippines, please do not hesitate to contact us. Our team of seasoned investment professionals can guide you through the process, providing insights based on extensive experience and local market knowledge.

In conclusion, the operational real estate asset class in the Philippines presents an exciting avenue for investors seeking to diversify their portfolios and tap into the growth potential of the Southeast Asian nation’s real estate sector. With the right strategy and a focus on operational excellence, the potential for high returns is significantly promising.