The Philippine property sector is still on the decline as the economy is trying its best to recover. The pandemic greatly affected the different business conditions, office, residential, retail, and hotel vacancies, according to the property consulting firm Colliers International Philippines.
The industrial segments seem to be the only segment that is continuously on a steady rise amid the coronavirus pandemic. As it is operated by the rising of warehouses and logistics requirements.
Metro Manila has hit an all-time high of 15.6 percent in residential vacancy last 2020 and will continue to worsen to at least 16.9 percent. Affecting the business districts with substantial stock like the Bay Area and Bonifacio Global City, according to Joe Roi Bondoc, the associate director at Collier Philippines.
The residential property fell by 13. 2 percent last 2020. Completely lower than the reverse 26 percent of the increase in 2019. Starting by 2022, Collier expects a slow recovery, accompanied by the rebound in Metro Manila office rent.
In addition, the residential rents decrease by 7.8 percent higher since the Global Financial Crisis of 2008-2009, but it is a little bit lower than the decline seen during the Asian Financial Crisis of 1997, where the rents declined by 15.4 percent.
“In 2022, we expect prices and rents to increase by about 1.5 percent and 1.7 percent year-on-year, respectively. We expect the pace of growth to hinge on a rebound in local and foreign investor sentiment and a recovery in office space absorption,” Bondoc said.
This year office vacancy rates are expected to worsen to 12.5 percent from 9.1 percent at the end of last year, the highest since 2003. As the Philippine Offshore Gaming Operators continue to withdraw from the market while the outsourcing firms rationalize the office requirements.
Dom Fredrick Andaya, Colliers director for office services said that after the average 17 percent decline last year, the office leasing rates would further drop to at least 15 percent this year. On the other hand, the sector would deviate at the earliest by the third or fourth quarter of this year and start recovering in 2022.
In the hotel segment, only 20 percent was the occupancy rates in the second half of 2020. Compared to before the pandemic, with an average of 72 percent. This is because of the low foreign arrivals and the subdued local demand.
Collier anticipates that international and domestic tourism will not likely recover for the next 12 months, leading for the occupancy rates to remain at 30 percent this 2021.
Furthermore, Collier projects an active take-up of industrial space this 2021 to 2022. The manufacturing and logistics investments, being one of the main factors that are led by companies that mainly focus on the essential goods industry like food, beverages, and pharmaceuticals.
“We expect a healthy demand for the warehousing sector supported by the growth of e-commerce and the emergence of a lockdown economy,” Bondoc said.
“We recommend that developers construct more cold storage facilities as demand in areas such as Metro Manila, Pampanga and the Cavite-Laguna-Batangas corridor remains underserved. We expect demand to be driven by the growth of deliveries of perishable food items and groceries. This will likely be complemented by the government’s anti-COVID-19 vaccination program as some vaccines require cold chain facilities to ensure product quality,” he added.