JLL Philippines sees a slower recovery of the real estate sector that would be more of an L-shaped on, a less optimistic view from the W-shaped it saw in the first quarter.
But the property consultancy sees some green shoots in the industry.
Janlo delos Reyes, JLL Philippines head of research and consulting, is optimistic of a bounce back owing to new developments such as the implementation of the Real Estate Investment Trust (REITs) following the launch of Ayala Land Inc.’s which will be a welcome development in the capital markets and real state activities; digitalization and technology adoption which will lead to opportunities for other class assets like data centers and; infrastructure development.
Delos Reyes said developers have shifted to hyperlocal by making their communities their main catchment market due to the limited mobility.
“One other key thing that will drive domestic domestic recovery is infrastructure projects which will be coming in the next coming years. And this will help support the real estate and the economy moving forward,” Delos Reyes said.
He said property owners have pivoted to strategies that would enable them cater to the needs of buyers/occupiers during the pandemic such as the temporary conversion of existing spaces like hotels for the housing for essential employees and or convention facilities as treatment centers.
Delos Reyes said smart cities and townships will be a significant part of real estate as an interesting, and even salient business model for a lot of developers.
“The reason being is number one you’re able to spread your risk across different asset classes in just one asset classes. At least you have other asset classes that will be able to support that business. Given the limited mobility and also the reluctance of people to travel. It’s important that you have all of your basic necessities in one area,” Delos Reyes said.
Aside from data centers as emerging asset classes due to digitalization, JLL sees logistics and industrial spaces as one of the bright spots in the market moving forward.
For the second quarter review, JLL 350,000 square meters (sq.m.) of office space in Metro Manila slipped in the second halg with another 260,000 sq.m. expected to slip in 2021 with vacancy rates climbing to about 13 percent.
Residential slippage to the second semester amounts to 21,200 units mostly in mid to luxury market and an estimate 35,800 units at risk for slippage. Pre-selling of condominium units meanwhile dropped with selling prices of pipeline developments exhibiting declines.
Slippage in retail is about 60,000 sq.m. with another 61,000 sq.m. at risk of slipping in 2021.
In hospitality, about 2,000 rooms slipped to the second half and another 200 at risk of slippage.