Long Leases, Greater Confidence: How the 99-Year Lease Rule Impacts Foreign Investment and Real Estate Development

Long Leases, Greater Confidence: How the 99-Year Lease Rule Impacts Foreign Investment and Real Estate Development
In September 2025, the Philippine government approved a transformative reform extending land-lease terms for foreign investors to up to 99 years, a significant increase from the previous standard of 50 years (plus a possible 25-year renewal). While foreign nationals remain constitutionally barred from outright land ownership in the Philippines, this policy shift signals a decisive move to attract long-term foreign capital, and may reshape the landscape of commercial, industrial and real-estate projects across Metro Manila and regional growth hubs.
For institutional investors, multinational developers and foreign companies exploring the Philippine market, this reform introduces a fresh layer of stability, longevity and confidence—particularly for projects with multi-decade lifecycles such as manufacturing hubs, logistics parks, energy and technology estates, and mixed-use development.

1. Understanding the Reform: What Changed and Why It Matters
Previously, under the framework of the Investors’ Lease Act, foreign nationals and corporations could lease private land in the Philippines for up to 50 years, plus one renewal of up to 25 years. The new legislation (Republic Act 12252) allows leases of up to 99 years in a single continuous term.
According to CHLP Realty, extending the lease term to 99 years is being framed as a “game-changer for foreign investors”, strengthening the link between land access and long-term value creation. Asia Lifestyle Magazine supports this, noting that the Philippines’ move aligns more closely with regional peers and addresses one of the major constraints for foreign-investor confidence: land tenure uncertainty.
Crucially, the reform does not alter the constitutional prohibition on foreign land ownership, but it raises the functional utility of leasehold arrangements to a near-freehold equivalent in many practical senses—especially for investors with long-term horizons.

2. What This Means for Foreign Investors
A. Long-Term Project Viability
A 99-year lease offers project horizons that span multiple decades—vital for capital-intensive sectors such as industrial parks, export zones, data centres, renewable-energy installations, and large-scale logistics and warehousing. With the previous 50 + 25 year structure, investors faced the risk of mid-course renegotiation or reduction in tenure.
B. Greater Security and Bankability
By offering longer-term tenure, the reform enhances investor confidence and makes leasehold interests more “financeable”, as they resemble long-life assets. Asia Lifestyle emphasises that this shift mitigates the “renewal risk” that foreign investors previously cited as a deterrent.
C. Access to Regional Development & Decentralised Growth
Beyond Metro Manila, the longer-term lease opens up opportunities in regional hubs: industrial estates in Pampanga, logistics corridors in Batangas, high-tech parks in Cebu, eco-industrial zones in Davao. As CHLP Realty notes, the reform applies to commercial, tourism, agricultural and industrial properties, not solely leisure or resort-based projects.
This means foreign companies can now more confidently sponsor or invest in mixed-use developments, integrated manufacturing/logistics sites or tourism-infrastructure projects in emerging growth centres.

3. Leasehold vs Freehold: A Quick Comparison
Feature
Freehold (Filipino Citizens / Filipino-majority companies)
Leasehold (Foreign Investors)
Ownership
Full title to land
Lease rights only
Term Limit
None
Up to 99 years
Transfer
Yes
Yes (via assignment/transfer)
Access to land-based projects
Yes
Yes (via long-term lease)

While leasehold doesn’t confer direct ownership, the extended 99-year structure offers long-term utility that mirrors many of the functional benefits of owning a property, particularly for investors planning across generations.

4. Developer & Industry Response: More Flexible Offerings Ahead
Industry-commentary predicts a wave of lease-based development models tailored to foreign investors and long-stay asset users. Developers are preparing to:
Launch lease-based industrial parks and logistics hubs engineered for multinational tenancy, with the 99-year term underpinning multi-decade operations.

Re-price and re-package existing leasehold projects to reflect the enhanced usability and exit horizon that the longer term allows.

Structure joint ventures with foreign developers, institutional funds and REITs that capitalise on long-term land-secured leases.

Promote regional corridors—Pampanga, Laguna, Cebu, Palawan—as zones for long-term lease-based high-end or industrial developments aimed at foreign firms, returning or expatriate-led capital.

As CHLP Realty puts it, the new law “promises job creation, stronger investments, higher land values and better infrastructure” with the extended lease rights.

5. Considerations for Investors Exploring Leasehold Properties
Before committing to a 99-year leasehold investment, foreign investors should carefully evaluate:
Developer or Lessor Reputation
Long-term tenure places a premium on the lessor’s (or estate operator’s) ability to maintain infrastructure, comply with regulation, manage estate governance over decades.
Clarity of Lease Terms
Key contract provisions should be crystal-clear: permitted uses, sub-leasing rights, renewal or early termination clauses, transfer and inheritance mechanics, aligning with your business model and exit strategy. Legal commentary emphasises that the lease must be registered with the local Registry of Deeds to ensure it is enforceable.
Property Use & Zoning Compatibility
Ensure that the land is designated and zoned for your intended activity — industrial, logistics, agro-industrial, tourism, mixed-use — and that there are no agrarian reform or conversion issues that could undermine the tenancy.
Financing & Collateral Position
A 99-year lease improves collateral value but due diligence remains essential: lenders will evaluate the lease term, lessor’s title, registration status, and project viability. Engage financial institutions experienced in long-term lease-backed financing.
Exit Strategy & Value Creation Horizon
A longer lease term supports a longer investment horizon—which is positive, but you should still consider exit options (secondary market, REIT conversion, assignment) and value-uplift drivers (zoning changes, infrastructure upgrades, regional growth).

6. Looking Ahead to 2026 and Beyond
Industry sources — including the Global Property Guide, Cushman & Wakefield and others — highlight that the 99-year lease reform will help the Philippines:
Attract multi-decade foreign direct investment (FDI) that was previously deterred by the shorter lease horizon. Reuters+1

Promote regional diversification of investment, as investors seek industrial/logistics/tourism assets outside the saturated Metro Manila market.

Strengthen the Philippines’ competitiveness relative to neighbouring countries (e.g., Vietnam, Indonesia) in attracting large-scale manufacturing, logistics and infrastructure investment. The Economic Times

Provide structural support for large-scale infrastructure and mixed-use development by reducing the land-tenure risk premium built into project financing and valuation.

By offering a near-century lease horizon, the Philippines gives institutional and corporate investors the time-frame they need to execute multi-phase developments, scale operations, and harvest value across decades rather than years.

7. How LiveHerePH Helps Investors Navigate Leasehold Opportunities
At LiveHerePH, we specialise in guiding foreign companies, private equity funds, and institutional investors through this enhanced lease-hold landscape. Our services include:

Access to verified long-term lease opportunities from reputable developers and land-owners, tailored to commercial, industrial and mixed-use mandates.

Make sure you fully understand the lease terms before signing any agreement. Clarifying details early can protect you from future complications.

Market insights: identifying regional corridors, infrastructure-driven growth zones, and sectors where 99-year leaseholds now unlock project viability.

Are matched with properties that balance lifestyle goals, legacy ambitions, and investment returns
Whether you’re a returning Filipino, an expat planning long-term residence, or a global investor eyeing the next frontier, this leasehold reform empowers you to make smarter, more confident choices.

Conclusion
The 99-year lease rule is more than a technicality, it’s a strategic turning point in the Philippine luxury property market. It enhances confidence, opens new avenues for foreign investors, and invites a longer view on real estate value.

For those considering their next big move, now is the time to explore leasehold opportunities with clarity and purpose, and LiveHerePH is ready to walk you through every step.
Explore premium leasehold properties and expert buyer support at LiveHerePH

Sources:
CHLP Realty. “99-Year Land Lease Philippines: Game-Changer for Foreign Investors.” 2025. CHLP REALTY
Asia Lifestyle Magazine. “Philippines’ 99-Year Leasehold Law: What It Means for Foreign Ownership in Asia.” Sept 28 2025. Asia Lifestyle Magazine
Reuters. “Philippines extends land leases to 99 years to attract foreign investors.” Sept 5 2025. Reuters
One Asia Legal. “Republic Act No. 12252 and its 99-Year Lease Term for Foreign Investors.” Oct 3 2025. One Asia Lawyers | One Asia Lawyers