Leechiu Property Consultants (LPC) said the office segment is leading the recovery of the real estate sector.
Mikko Barranda, LPC director, said office space takeup in the Philippines could reach 500,000 to 600,000 square meters (sq.m.) by yearend as the segment bounces back.
“The IT-BPM (information technology and business process management) industry alone is seeking to occupy this year 190,000 sq.m. of office space or 58 percent of the live requirements,” said Barranda.
Takeup for the rest of the year is seen hitting 330,000 sq.m. after 291,000 had been occupied.
Traditional firms like those in the e-commerce and logistics business, need 122,000 sq.m., of office space, 37 percent of the projected full-year takeup.
“POGO (Philippine offshore gaming operations) firms are seeking 17,000 sq.m. or 5 percent,” Barranda said.
Barranda said the renewed interest in the office market by POGOs “tells us their tax concerns have been clarified by SB (Senate Bill) 2232,” which aims to tax POGO operations in the Philippines.
Barranda said POGOs may expand again as soon as travel bans are lifted.
Office takeup in the first half of the year hit 291,000 sq.m., up 19.59 percent from 234,000 sq.m. last year, with the IT-BPM sector cornering 44 percent of demand. The figure is 75 percent of the projected full-year takeup.
“Economic stability in the West and the sustained rollout of the vaccines in the Philippines have prompted their return. They will be on expansion mode up to yearend,” said Barranda.
Vacancy across Metro Manila stands at 13 percent, with Quezon City having the highest vacancy rate of 20 percent and Makati, Bonifacio Global City and Taguig City having 9 percent.
Alvin Magat, also an LPC director, said complementing the office segment’s growth is the resiliency of the residential segment.
Property prices in prime masterplanned communities have remained strong into the 15 months of the COVID-19 (new coronavirus disease 2019) pandemic, said Magat, with the accommodation value – lot price per sq.m. divided by the floor area ratio (FAR) of a property – at an all-time high at over P100,000.
“Prices in gated luxury villages have held up with lots in Forbes Park and Dasmarinas Village in Makati are still going for P420,000-P450,000 per sq.m., while they have increased by 17 percent to P175,000 at Ayala Alabang Village,” Magat said.
Roy Golez, another LPC director, said the residential sector remains “healthy with sales velocity or speed of takeups hovering above the number of new launches as of the second quarter of the year.”
“The sustained launches of residential condominium projects for the second quarter were likewise indicative of developers’ market confidence,” he said.
High-end condominium units ranging from P12 million to P68 million sold the most for the period followed by upper middle income units ranging from P4 million to P7 million “as investors increased their assets for capital preservation while taking advantage of low interest rates,” according to Golez.
“Even properties in Nasugbu gated resorts rose by a hefty 214 percent with city folk willing to pay top prices for seaside homes within reach. Peninsula de Punta Fuego lots selling in 2020 for as low as P12,000 to P60,000 (per sq.m.)had increased by 2021 to P20,000 to P100,000 illustrating the appeal of Second Homes, Golez added.
Golez said prices are expected to appreciate further with the completion of new infrastructure projects such as CALAX which will cut travel time to the cited communities.
