Recovery of the country’s property sector next year is assured, according to Joey Roi Bondoc, Colliers head of research.
“Landlords should prepare to capture pent-up demand while tenants and investors should maximize opportunities as the market is on its way to recovery,” Bondoc said, stressing the office, residential, retail and industrial sectors will benefit from a macroeconomic rebound.
Bondoc said vacancy in Metro Manila will stay at 15.6 percent as the year draws to a close and occupiers continue to vacate office space in Metro Manila.
“Improvement in business sentiment in the next 12 months complemented by greater vaccination rates will likely lead to potential rebound in office space absorption in 2022,” he said.
In the first nine months of the year, takeup hit 302,600 square meters (sq.m.), up 2 percent from 295,800 sq.m. last year.
Traditional occupiers make up 61 percent of the total transactions.
Bondoc said the adoption of sustainable office spaces will play a crucial role in future-proofing office towers beyond 2022, with occupiers likely to prefer more “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 healthier and more productive workforce,” he added.
The residential segment is expected to get a boost from the completion of major infrastructure projects which will benefit key provinces in Northern and Central Luzon including Pampanga and Bulacan, said Bondoc.
“These projects will be complemented by the completion of the New Manila International Airport and the expansion of Clark International Airport. Aside from improving connectivity, these infrastructure projects should also raise land values outside the capital region,” Bondoc said.
The retail segment will benefit from the revitalization of spending, he said.
This is expected to reverse the cautiousness of developers which only completed 53,100 sq.m. of new space this year, down from the annual average of 323,200 sq.m. from 2017 to 2019.
“For 2022, Colliers forecasts vacancy in the retail sector rising to about 17 percent, partially due to the substantial new supply of about 523,700 sq.m. likely to be delivered and tepid demand because of the changeable lockdown situation in Metro Manila,” Bondoc said.
“Filipinos’ growing propensity to shop online remains an important factor that will likely influence physical mall space absorption beyond 2022. Colliers recommends that retailers expand their e-commerce presence and maximize technological advantages,” Bondoc said.
Nine months into 2021, retail rents dropped 5 percent, from a 10 percent decline in the same period in 2020, he added.
The hotel segment may benefit from the resumption of domestic tourism.
“ Revenge travel among local travelers should also help increase occupancies of selected hotels across the country,” said Bondoc.
Next year, about 1,027 hotel rooms are likely to be delivered, with the Bay Area accounting for about 81 percent of the new supply, though it will remain tepid up to 2022 before gradually rebounding in 2023, Colliers said.
“Colliers also projects average daily rates to decline by 10 percent in 2021 before a slow recovery starting 2023 on the back of improved foreign and domestic visitors,” said Bondoc.
Bondoc also said e-commerce will continue to drive the industrial space’s growth.
In the first half of this year, industrial vacancy in the Cavite-Laguna-Batangas corridor slid marginally to 5.6 percent from 5.7 percent last year as demand for warehouse and storage space among e-commerce and fast-moving consumer goods grew, given the growth in online shopping.
Bondoc said the demand for cold storage facilities will continue in the next 12 to 36 months.
“Colliers believes developers can further capture the rising opportunities in the industrial sector by refurbishing existing warehouse facilities. Developers are encouraged to utilize advanced-technology such as facility automation, artificial intelligence systems, and cloud- managed IT solutions,” he said.
