The property sector is expected to “refocus, reboot and revalue” this year but some segments will not see an immediate return to pre-pandemic levels, according to Rick Santos, chairman of property consultancy Santos Knight Frank Inc. (SKF) .
One of those sectors is the hotel and tourism property segment.
Kash Salador, SKF associate director, said some hotels will be up for sale due to the impact of the pandemic.
Salvador did not provide details but said this observation is based on his conversations on the ground.
This follows after the announcement last week of Makati Shangri- La it will temporarily halt operation starting February in response to the tight hotel business environment and a projected prolonged recovery time of the tourism sector due to the pandemic.
In a press briefing, Santos said 2021 will be a banner year for the industrial and logistics segment driven by demand for space by electronic commerce.
“Cold storage facilities, warehouses, and distribution centers will be in demand this year, while data centers present a long-term opportunity for both the sector and the country,” Santos said.
He added: “E-commerce continues to contribute to the expansion of the industrial and logistics sector. Online retail in the Philippines is expected to grow by 26 percent in 2021.”
Santos said many consumers were forced to adapt to e-commerce platforms for their household necessities such as food, groceries, and essential supplies during the lockdown period.
“This has not only accelerated the adoption of e-commerce across multiple product lines but also ensured the long-lasting impact on consumer behavior, with important implications on the growth of the industrial and logistics,” he added.
The office market meanwhile will see developers focusing on the convergence of commercial and residential strategies, SKF said.
SKF noted the new coronavirus disease 2019 pandemic forced occupiers to adopt remote work setups resulting to Metro Manila’s office vacancy to increase to 9.8 percent last year.
The property consultant said for the year, tenants – especially business process outsourcing (BPO) companies – will resume scouting new locations for expansion and office rightsizing requirements.
“With vacancy high and asking lease rates having grown by only 1.7 percent in 2020, the availability of a greater amount of fitted space and prime office space, which were once difficult to secure, is seen as an opportunity for companies aiming for better locations,” it said.
SKF pegs the incoming office supply in Metro Manila to hit 1.2 million square meters (sq.m.).
SKF also said second-tier cities like Iloilo and Clark in Pampanga will also attract locator interests, particularly for BPOs which is estimated to stake up 20,000 to 40,000 sq.m. of additional space this year outside Metro Manila.
The residential market is expected to display a slow but steady rebound overall, with the segment offering buying opportunities with better deals in terms of price and payment terms.
SKF said developers have extended flexible payment schemes to drive demand while in terms of financing, more competitive interest rates from the banks can encourage more homebuying.
“2020 was a challenging year for Philippine real estate and the global property market, but we see the new year as a promising time for real estate sectors such as industrial and logistics, office, residential, REITs, and data centers, among others. In general, we expect to see a soft rebound in the real estate market as the economy gradually recovers,” Santos said.