3Q 2018 - Office, Residential and Retail
We are pleased to announce that the 3rd quarter 2018 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.
The Metro Manila office market is on track to posting record-high supply and net take up for 2018. Outsourcing firms continue to expand and account for the largest share of transactions. Colliers encourages developers to provide flexible office floor cuts, implement creative leasing schemes, and offer non-Philippine Economic Zone Authority (PEZA) proclaimed buildings to offshore gaming firms. Meanwhile, tenants that need to occupy space in the next 12 to 24 months should start pre-leasing and locking in rates in Ortigas Center, while Knowledge Process Outsourcing (KPO) and multinational corporations (MNCs) should consider office space in Fort Bonifacio that will likely be vacated from 4Q2018 to 2019.
Stable Despite Ramped Up Supply
A mix of demand from offshore gaming employees and local professionals is helping sustain the Metro Manila residential market. Vacancy in the secondary market continues to drop despite an aggressive completion of new units in 3Q2018. To seize opportunities in the sector, Colliers recommends that developers pursue more projects in the peripheries of established business districts; tap the rising demand for worker housing; tie up with the government for the skills upgrading of construction workers; push for the entry of 100% foreign-owned contractors; and be more flexible to the residential demand of offshore gaming operators.
Food, Glorious Food
Colliers believes that the food and beverage (F&B) segment remains as the major driver of retail space occupancy in Metro Manila. We also see opportunities in home furnishing especially with the entry of major foreign brands and more pronounced completion of condominium units across Metro Manila. Colliers encourages developers to look at the viability of housing more high-end shops in the Bay Area; continue offering a differentiated mix of retailers to consumers; carve out co-working space in new malls; and curate retail offerings based on the growth of consumer spending sub-segments.