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Manila Market Intelligence July 8, 2021

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DMCI allots P10.5 billion for new condo project In Quezon City

NEWS

DMCI Homes Inc. is set to construct a PHP10.5 billion (USD220 million) two-tower condominium, The Oriana, which is located along Aurora Boulevard in Quezon City. The 9,314 sq metre property (100,200 sq feet) is also situated near the existing LRT-2 rail line and the proposed Anonas station of the Metro Manila Subway System. The project will also likely offer two-bedroom layouts with sizes ranging from 54.5 to 81.5 sq metres (586 to 877 sq feet). Launched in April, the North Tower will offer 1,242 units and is scheduled for turnover starting April 2026.

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RESEARCH VIEW

In Q1 2021, Colliers saw vacancy in the Metro Manila secondary residential market rising to 16.3%, from 11.3% in Q1 2020. Meanwhile, launches and take-up in the pre-selling market declined to 4,400 and 5,300 units, respectively, a significant drop from the 7,800 units launched and 11,300 units sold in the same period of 2020. Colliers believes that the condominium market’s recovery is likely to hinge on the successful roll out of the COVID-19 vaccine and recovery of office leasing market. We encourage developers and investors to continue exploring the viability of residential properties in strategic locations which are near transport hubs and other infrastructure projects likely to be completed in the next 12 to 36 months.

Wells Fargo to retain BPO center in Manila
   

NEWS

Wells Fargo & Co. is maintaining its business process outsourcing (BPO) office in the country despite announcing that it will close its Manila representative office as the bank simplifies its international operations. Representative offices serve as a liaison office that allow banks to promote their products and services locally. Wells Fargo’s office was established in 2011 and has evolved to provide project management, data analytics and finance and accounting services. According to the Bangko Sentral ng Pilipinas (BSP) or central bank only about 11 representative offices of foreign banks remain in the country. Meanwhile, the Korea Development Bank’s liaison office has also ceased operations in April.

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RESEARCH VIEW

In Q1 2021, Colliers recorded 8,000 square meters (86,100 square feet) of office deals from outsourcing firms, down 77% from the 35,000 square meters (376,600 square feet) recorded in Q1 2020 as we continue to see a challenging office leasing environment. While some outsourcing firms continue to expand,some of them rationalize office space requirements and carry out remote work schemes. Colliers believes that outsourcing firms are likely to continue these measures until all employees have been vaccinated against Covid-19. We encourage developers to further explore the viability of building offices in Bulacan, Pampanga, Laguna and Iloilo to capture the growing demand from firms locating outside the capital region. In our opinion, Metro Manila’s office market demand recovery will likely hinge on the pace of the Covid-19 vaccination program which should bolster firms’ confidence to return to traditional offices.

Improved green building system accounts for community engagement, economic opportunities

NEWS

The Philippine Green Building Council (PHILGBC) has updated Berde, a local green building rating system, by adding health and well-being (replaces indoor environment quality), community engagement, and economic opportunities to its core framework which is now composed of 11 categories. According to PHILGBC, the additional categories were added to provide better guidance on how building projects should comply with the different requirements needed to secure a Berde certification. Three projects in Cebu, plus one project each in Manila and Davao have all registered for Berde certification in 2021. In total, there are currently 69 green buildings projects registered and undergoing various stages of certification across the country.


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RESEARCH VIEW

Colliers believes that adopting green and sustainable features plays a crucial role in future-proofing office towers beyond the Covid-19 pandemic. The pandemic has accelerated the adoption of sustainable office spaces and we are likely to see this trend complementing recovery in office leasing demand beyond 2021. In the next 12 to 36 months, about 37% of the new supply in Metro Manila will likely be wellness certified buildings. In our view, there will likely be a heightened preference for sustainable buildings that provide natural lighting and optimize air quality, among other features. Over the next three to five years, these features should result in utility and talent acquisition cost savings and contribute to a healthier and more productive workforce. Colliers recommends that developers upgrade their buildings by incorporating technology and design enhancements in office space as we see the increasing importance of LEED and WELL certified options in attracting major and discerning tenants.

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Related Experts

Joey Bondoc

Associate Director

Research

Manila

Prior to joining Colliers in March 2016, Joey worked as a Research Manager for a research and consutancy firm where he handled business, political, and macroeconomic analysis. He took part in a number of consultancy projects with multilateral agencies and provided research support and policy recommendations to key government officials and top executives of MNCs in the Philippines.

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Martin Aguila

Senior Analyst

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Martin Aguila graduated in February 2019 from the De La Salle University with a degree in AB Economics. He joined Colliers Philippines in the same month and works as an analyst under the Research department. He has presented in several property market briefings with developers and investors and has assisted in the preparation of reports related to property such as Market Intelligence, GDP Flash, Quarterly Market Updates and Radar Reports. He also helps the team maintain and develop databases.

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