We are pleased to share that our property market reports for the 2nd quarter of 2021 are now available. Read key updates on the Philippine property, covering office, residential, hotel, and industrial sectors and our data-supported recommendations to industry stakeholders.
Turning a Corner
Vaccinations to spearhead leasing and rental recovery
Colliers believes that office market recovery will primarily hinge on vaccination progress and the further easing of mobility restrictions.
New office space absorption continued to be led by outsourcing and traditional firms that implement a mix of rightsizing, consolidation, expansion and relocation strategies.
Moving forward, Colliers believes that rebound in deals and rents will be anchored by the government’s vaccination program.
Colliers encourages landlords and tenants to:
• Determine the optimal level of split operations and execute these plans for a safer working environment.
• Implement flight-to-value and flight-to-quality measures.
• Explore fully fitted and flexible workspaces for tenants’ immediate space requirements.
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Ready to Launch
Developers line up projects to capture pent up demand
Colliers expects recovery in residential take up in 2022 on the back of a rebound in office leasing; macroeconomic recovery; sustained remittances from Filipinos working abroad; competitive mortgage rates; and a pickup in business and consumer sentiment. An accelerated vaccination program across the Philippines should support these factors and encourage more businesses to reopen and expand.
In our view, the projected recovery in residential completion in 2021 partly indicates a rebound of the secondary residential market in Metro Manila.
Aside from lining up more launches to maximize pent-up demand, developers should be aggressive in utilizing online platforms and improving amenities by incorporating co-working spaces to cater to the market’s discerning preferences.
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Local Before Global
Domestic tourism to kickstart leisure sector recovery as restrictions hamper global travel
Colliers sees a slow recovery for the leisure sector especially with domestic and international travel restrictions still in place and new Covid variants dampening consumer confidence.
In our view, domestic travel will stoke the leisure sector first, particularly with the Philippine government’s thrust to improve hotel occupancies and revive local jobs. This is also in line with its goal of raising tourism’s contribution to the economy.
Colliers believes that hotel operators should continue tweaking their marketing strategies to maximize the sector’s recovery.
Hotel operators should implement trainings and refresher programs to maintain the highest levels of quality; provide flexibility in guests’ bookings; prioritize staff vaccinations; take advantage of incentives given by the government for hotels operating amid Covid; and adopt a multiple-use model to cater to both leisure and quarantine guests.
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Hot on cold storage
Industrial sector’s streak continues as cold storage demand heats up
Colliers believes that the industrial sector will thrive beyond 2021 as we see recovery in both local and global demand sustaining the growth of e-commerce, domestic manufacturing and the export sectors.
We expect developers to remain proactive in acquiring parcels of land that can be developed into industrial parks and in refurbishing assets to meet the demand for modern warehouses and cold storage facilities. We attribute the surge in demand to a continuously thriving e-commerce sector and ramped up Covid vaccination efforts across the country.
Colliers encourages developers to consider divesting industrial assets into their respective REIT vehicles; expand cold storage assets; modernize warehouses; monitor the demand for built-to-suit facilities; and continuously monitor government incentives for firms bridging the supply gap for cold chain assets, which may include tax breaks.
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