There are a number of Philippine real estate market opportunities currently available as the country gradually emerges from the shadow of COVID-19. During a recent seminar, Rick Santos, Chairman and CEO of Santos Knight Frank, explained that 2021 may yet be a promising year for several sectors, including industrial & logistics, urban residential and real estate investment trusts (REITs).
That being said, some macrotrends, such as the boom of e-commerce, infrastructure development, decentralization and workplace mobility, will see the property market evolve during the second half of this year.
The key is to understand how these trends are creating new Philippine real estate market opportunities. Let’s take a look at three things Santos Knight Frank noted during The Wealth Report 2021: A Global & Philippine Real Estate Investment Outlook.
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3 Philippine real estate market opportunities currently available
1) E-commerce drives demand for industrial and logistics spaces
Landlords and developers have been converting commercial space into storage and warehouse facilities as demand from e-commerce firms continues to expand. Even some shopping malls became outfitted for logistics, a switch that would have been impossible to comprehend before the COVID-19 pandemic.
Further growth in the e-commerce sector is predicted which would lead to stronger demand for goods and storage spaces. According to Santos Knight Frank, cold storage spaces and cold chain solutions have been popular in 2021 since these are vital to accommodate vaccine rollout requirements.
2) Tenants now in charge
Of all the Philippine real estate market opportunities currently available, the most surprising one comes from Metro Manila’s office sector. Tenants are now in charge here and have the ability to renegotiate lease rates, innovate deal structures and consider subleasing spaces.
The past decade has seen the office sector definitively favor landlords with low vacancies and strong demand pushing up rents. COVID-19 put a halt to that with tenants now having the upper hand ahead of employees returning to the office.
3) Don’t count out the Metro Manila residential sector just yet
While there has been an increase in demand for residential properties outside of Metro Manila, this trend will likely be short lived. Liam Bailey, Global Head of Research of Knight Frank, believes people are eventually going to return to urban areas, especially those who work in the city center. He stated that the long commute between homes in the suburbs and Metro Manila offices isn’t something most employees want to deal with on a daily basis.
Related: 4 things to know about Philippine condo investment in 2021
