It’s a slow recovery but a recovery nonetheless.
This is how consultancy firm Colliers describes the performance of the property sector in the first nine months of 2022 and its prospects for the rest of the year.
Kevin Jara, Colliers associate director for office services in a press briefing, said the office segment posted sustained transactions since the start of the year, with 29,000 square meters (sq.m.) in net take-up.
Jara said Colliers expects the segment to post a 140,000 sq.m. net take-up by yearend, as the absorption remains dominated by the business process outsourcing (BPO) sector.
Jara, however, said the office segment’s performance will not be smooth sailing going forward as it has to contend with vacancies, incoming pipeline and work- from- home arrangements for BPOs.
This year, Colliers sees new supply reaching 783,900 sq.m., of which 60 percent will be in the Bay Area and Makati fringe areas.
Rents are expected to drop 10 percent and bottoming out next year.
Since 2020, rents have corrected by about 35 percent.
Vacancy is expected rise to 19.5 percent this year on muted pre-leasing in upcoming buildings. Colliers said the improved leasing activity points to a sustained recovery in the Manila office market.
“But some areas will recover faster than the others like faster moving markets like BGC (Bonifacio Global City) and Makati, given the pace of transactions right now…and decreasing vacancies… versus some areas like the Bay Area, Alabang which are still suffering from vacated spaces by Philippine offshore gaming operations (POGOS) ,” he said.
Jara said the market should move on past the concern on POGOs as the segment is just around 5 percent of office demand.
Joey Bondoc, Colliers associate director for research, said the residential market points to a good 2022 with take-up figures likely to surpass 2021 figures.
Nine-month figures were recorded at 15,000 units compared to last year’s 13,000 units.
Colliers said employees returning to traditional office spaces continue to fuel demand for condominium units for lease in key business hubs.
Unit completions hit 3,714 units in the third quarter with full-year delivery seen at 10,100 units. Of that, 60 percent are in the Bay Area.
The property consultant said the Bay Area will continue to dominate new supply and will likely have the largest stock by 2024.
“While there’s some recovery, it’s still not good enough to even exceed the 2020 figures. If you look at the secondary market demand, we’re still looking at higher vacancy in fact that we will still hover at about 17 percent,” Bondoc said.
Bondoc said it will be a “slow” recovery for the residential market in terms of price and rents for 2022 till 2024.
Vacancy is expected to drop to 17.6 percent this year, due to the substantial number of new units coming into the market, particularly from the Bay Area.
Prices are expected to increase by 3.7 percent this year, backed by improving consumer and business sentiment and a steady inflow of overseas Filipino remittances.
