Colliers International identified key issues and opportunities in the Philippine property market particularly in the office, residential and retail sectors
1Q 2019 - Office, Residential and Retail
We are pleased to announce that the 1st quarter 2019 property market report is now available. Global real estate services company Colliers International, in a recently released report, identified key issues and opportunities in the Philippine property market particularly in the office, residential and retail sectors
OFFICEIn Q1 2019, Colliers recorded a marginal rise in vacancy due to substantial new supply in a number of business districts such as Quezon City. But low vacancy rates in the Makati CBD and the Bay Area have been constricting the expansion of tenants. A flight to quality, i.e. tenants’ transfer to newer and larger floorplate buildings was also prevalent during the period. To seize the rising demand, we encourage developers in locations with vacancy of between 0.6% and 3.0% to expedite construction and consider redeveloping old buildings.
Meanwhile, outsourcing tenants looking for PEZA-approved space should consider newly-completed buildings in Quezon City while other occupiers should explore available space in Fort Bonifacio.
RESIDENTIALStrong demand in the pre-selling market has continued to raise residential prices, with the most expensive condominium project now priced at approximately PHP550,000 (USD10,400) per square metre. Meanwhile, leasing demand remains firm, especially in business hubs that house offshore gaming firms from China. We recommend that developers should offer creative leasing models such as co-living, highlight features of projects such as landscaping, retail options, and accessibility; and launch more mid-income units. Meanwhile, investors should cash in on the potential for capital appreciation of condominiums in light of planned rail projects that should improve connectivity.
In Q1 2019 retail vacancy in Metro Manila rose after three consecutive quarters of decline. Despite this, we see opportunities as developers have been aggressive in renovating spaces and housing experiential and lifestyle-centric tenants to improve consumers’ retail experience and sustain footfall. To further capture opportunities, we encourage developers to use pockets of vacant space in malls to improve tenancy mix, incorporate foreign retail experiences, and utilize technology. Meanwhile, tenants testing the market should scout for available space in malls within integrated communities.