Property consultant Colliers International said developers should remain innovative to capture the “evolving preferences of investors and tenants” amid a “fiercely competitive Philippine property market.”
Colliers said developers “should actively engage in discussion with the government and other stakeholders regarding policies and programs that are likely to further redefine the property market over the next 12 months.”
It added that developers should look for opportunities to capture demand from foreign retailers in light of the lower capital requirements for foreign retailers.
They should also capitalize on opportunities for transit-oriented development outside Manila, following the national government’s infrastructure program, it said.
In 2019, the Philippine property sector remained robust but carried key adjustments in the strategies of property players in the past 12 months, said Colliers.
It noted the development of co-living projects as developers and commuters adjust to the worsening traffic in Metro Manila.
There was also the ramped up launch of mid-income condominium units in the fringes of major business districts due to dearth of developable land in central business districts.
According to Colliers, developers were aggressively raising landbanks and busy constructing office spaces outside the capital region as they follow the government’s infrastructure plan and identify alternative expansion sites for occupants, including Philippine offshore gaming operators and business process outsourcing, amid the government’s ecozone moratorium in Metro Manila and pending approval of a tax reform bill that purges tax perks to investors.
It likewise noted the entry of non-traditional mall tenants such as flexible workspace operators to avert the threat of increasing vacancy and sustain footfall.
However, Colliers sees “a number of headwinds that might constrict the property segment’s growth moving forward,” citing the acute shortage of skilled construction workers threatening the launch of more residential projects in Metro Manila.
It also noted lingering concerns on the final version of the Comprehensive Tax Reform Program to be approved by Congress.
“The delay in the approval of the measure that proposes to reduce corporate income tax rates and rationalize tax incentives granted to foreign investors has been compelling occupants to take a wait-and-see stance,” Colliers said.
It also cited the government’s inability to fully spend its infrastructure budget which is likely to result in delayed construction of vital public projects that provide direction to property developers’ expansion strategies.