Makati condos face redevelopment opening under proposed law

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Makati condos redevelopment law

Highlights

Congress ratified the Condominium Redevelopment Act, reducing owner approval thresholds for redeveloping units aged 30–50 years to two-thirds and 50+ years to a simple majority.
LPC identified Makati's central business district, with a higher proportion of aging buildings, as poised to benefit most from streamlined redevelopment rules.
Elevated construction costs, high borrowing rates and weak purchasing power constrain new developments, prompting developers to favor recycling underutilized Makati sites post-reform.

Approval changes reshape redevelopment prospects

As reported by BusinessWorld Online, Leechiu Property Consultants, Inc. said aging condominium buildings in Makati could become more attractive redevelopment targets after Congress ratified legislation meant to ease approval requirements for older properties.

The proposed Condominium Redevelopment Act seeks to amend Republic Act No. 4726, or the Condominium Act of 1966, by updating rules on the maintenance, repair, reconstruction, redevelopment and dissolution of condominium projects. LPC Analyst for Investment Sales Miggy Galvez said the current requirement for unanimous consent has been a major barrier, because a single dissenting owner can block an entire redevelopment plan.

Under the Senate-approved version discussed at LPC's third-quarter property market briefing, buildings less than 30 years old would still require unanimous approval for redevelopment. Projects aged 30 to 50 years would need the consent of two-thirds of stakeholders, while those at least 50 years old would require only a simple majority.

The reconciled measure also includes provisions covering condominium corporations, amendments to master deeds, tax exemptions for some common-area transfers and safeguards for unit owners. Sen. Francis G. Escudero, who sponsored the legislation, said the bill also provides options for liquidating condominium projects, including the sale of an entire property or the distribution of liquidating dividends to shareholders.

Makati stands out as the main beneficiary

LPC said the potential effect of the reforms is concentrated in established business districts, especially Makati, where a larger share of buildings is aging compared with the broader property market. The consultancy's third-quarter property market report covers 2,090 properties across the broader market, including 237 in the Makati central business district.

The firm identified Makati as a likely redevelopment area because of the age of existing buildings and the opportunity to reposition properties in established commercial locations. Galvez said the shift is not yet a market-wide redevelopment story, but is more relevant in mature CBDs where more building stock is nearing an age at which redevelopment becomes easier.

LPC added that a clearer redevelopment mechanism could help developers recycle underutilized sites even as the sector faces elevated construction costs, financing expenses and affordability constraints. The consultancy said slower economic growth, higher inflation and borrowing costs continue to weigh on property transactions, while household purchasing power struggles to keep pace with property prices, limiting developers' ability to cut prices and constraining demand for new residential projects.

Our earlier article on the planned Philippine sovereign bond market reforms explained how the shift to a new pricing convention and the targeted inclusion in J.P. Morgan’s Government Bond Index-Emerging Markets could broaden the investor base, improve liquidity, and support better price discovery. It also noted that these financial-market upgrades are not enough on their own: meaningful gains still depend on fiscal credibility, deeper domestic capital markets, and wider structural reforms that translate easier funding conditions into real business investment and productivity growth.

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