The Philippine economy contracted anew in Q3 2020, albeit at a much slower pace compared to Q2 2020.
Colliers believes that landlords and investors should take advantage of a government-projected quicker pace of economic growth in 2021.
Office developers should provide options to tenants planning to implement alternative schemes such as hub-and–spoke and be accommodating to those planning to firm up short-term leases. In our view, landlords should highlight the importance of traditional office space in promoting collaboration and corporate culture.
Residential developers should continue to touch base with investors and explore attractive price segments and locations for pre-selling condominium units. To tap pent up demand, developers should continue to offer flexible payment terms and adopt property technology (proptech) platforms. These include virtual reality (VR) tours and automated communication platforms for tenants and property management providers. Developers that held off new launches in 2020 that are planning to recapture demand in 2021 should consider price segments and locations that remained attractive during the lockdown. These include mid-income and upscale projects in Alabang, Mandaluyong, Parañaque, C5-Pasig corridor, and Caloocan-Malabon-Navotas-Valenzuela City (CAMANAVA).
Mall operators and retailers, meanwhile, should recapture the spike in consumer traffic by expanding offline-to-online strategies.
In our view, the timely approval and implementation of the 2021 national budget is crucial in supporting GDP growth in 2021. In our view, the continued construction of public projects such as roads and bridges is likely to stoke the property development sector. For 2021, the government has set aside PHP109 billion (USD2.3 billion) for the transportation department and about PHP667 billion (USD13.9 billion) for the Department of Public Works and Highways. In our view, these allocations will support the construction of infrastructure across the country beyond the current administration’s term. These public projects should also stoke demand for integrated communities outside of Metro Manila beyond 2022.