We are pleased to share that our property market reports for the 2nd quarter of 2020 are now available. Read about the latest key updates on the Philippine property industry, the impact of the COVID-19 pandemic to the office, residential, hotel and industrial sectors and our recommendations to industry stakeholders moving forward.
RECOVER LIKELY IN 2021 AS TENANTS WAIT AND SEE:
Landlords and tenants recalibrate and market uncertainties due to pandemic and lockdown
We continue to see less office take up as occupants shelve leasing plans. Colliers sees a substantial drop in POGO deals
but we expect tenants that cater to essential needs such as healthcare leading take-up starting H2 2020.
Limited manpower and antipandemic measures continue to slow construction. We see limited new office supply helping limit the rise in vacancy and decline in rents.
Colliers recommends developers proactively engage existing tenants and be creative in structuring deals for those who continue to look for new office space due to expansions, relocations, and consolidations. We recommend both landlords and tenants to actively push for approval of more PEZA spaces.
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TEMPORARY SETBACK PROVIDES LEEWAY FOR DEVELOPERS AND INVESTORS:
Condominium developers and buyers to cash in on opportunities post-pandemic and lockdown
The condominium market is starting to feel the adverse impact
of the pandemic and lockdown. We see a drop in condominium completions and an appetite for both existing and pre-selling units.
Colliers believes that the full impact of the pandemic may be more apparent in H2 2020. The government-projected economic recovery in 2021 is likely to help boost residential leasing and sales in Metro Manila.
Colliers recommends developers take advantage of the pick-up in demand by highlighting units located in integrated communities, implementing adequate property management, offering flexible payment terms to recapture demand, and monitoring OFW markets that drive take up for affordable to mid-income units.
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SAILING IN UNCHARTED WATERS:
Hotel operators to highlight innovations amid limitations
The Philippine leisure sector continues to suffer from the sluggish impacts of the global pandemic and imposition of travel
Like other property markets, the hotel segment is likely to suffer from delayed completion of new projects as developers factor in a sluggish recovery.
Colliers recommends that operators continue to target returning OFWs and professionals looking for co-living facilities and flexible workspaces.
We recommend operators highlight compliance with health and sanitation protocols and take advantage of concessions lined up by the government for the sector. Colliers also believes that now is an opportune time for operators to ramp up use of technology in providing innovative services.
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A SAFE BET AMID THE PANDEMIC:
Demand for logistics and manufactured essentials to keep industrial sector afloat despite pandemic, tax issues
Colliers believes that manufacturers of essential items such as food, medical, and other household products are likely to lead industrial space take up in 2020 and 2021. This should offset a subdued absorption from electronics manufacturers due to
the economic slowdown.
Official data show that in the next 12 to 24 months, we are likely to see more investments funneled into the transportation and storage sector.
Colliers recommends developers modernize warehouses to capture the growing demand for e-commerce; tie up with delivery firms in Metro Manila to reach more consumers; and monitor government incentives for manufacturers of essential goods.
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