Property consultant Santos Knight Frank (SKF) sees a significant rebound of the property sector in the next two to three years fueled by demand from commercial and residential segments.
The office segment is slowly revitalizing spurred by the business process outsourcing industry, as Philippine Economic Zone Authority-registered companies return on site.
“We saw an increase in leasing activity for the first time in a while (in the second quarter).
However, with 228,500 square meters (sq.m.) of new office space also added to the market in the period, the Metro Manila vacancy rate still rose to 23 percent,” said Morgan McGilvray, SKF senior director for occupier strategy & solutions.
Manila’s weighted average lease rate grew by 0.7 percent in the second quarter at P1,089 compared to P1,082 in the first quarter.
Commercial property demand is lifted by retail which registered a drop in space vacancy to 4.6 percent in the second quarter, closer to its pre-pandemic vacancy rate of 3.6 percent.
“The easing of travel restrictions, pent-up demand for consumption, high vaccination rates, and RTO are all being cited for the recovery in brick-and-mortar retail, a sector that saw many businesses closing shop during the height of pandemic lockdowns. Consumers also reported a higher level of confidence in the second quarter and better outlook for the rest of the year — despite inflation — according to the latest survey by the Bangko Sentral ng Pilipinas,” SKF said.
Rents averaged at P1,567, 4.4 percent lower than in the fourth quarter of 2019.
The data center sector continues to receive significant investment interest, with Santos Knight Frank tracking 220-megawatt (MW) worth of expressed interest, 90MW of which was in the second quarter alone.
Monica Gonzales, Santos Knight Frank data centers lead, said this 90MW capacity will likely double in the next two to three years.
Kash Salvador, Santos Knight Frank head of investment and capital market, meanwhile the luxury segment and the high-end segment of the residential condo market led the price increase at 7.2 percent and 4.8 percent respectively.
This is in contrast to the 1 percent increase recorded in the second quarter in the middle-income and affordable segment of the market.
“We see that pricing … for the majority are the middle income and the affordable segment are still conservative due to the stock of condos in the secondary market. We are seeing a lot of transactions there, which results to them not increasing the price too much to be sensitive to the market and to their buyers,” he said.
Salvador said Makati CBD condominium units continue to enjoy a premium over peers like in Taguig, Bay area, Ortigas, Alabang and Quezon City.
