The local office and residential property markets are expected to see a rebound this year, Lobien Realty Group (LRG) reported.
In their report, the group said the year will be better for the real estate industry with the rollout of the vaccines for the coronavirus disease 2019 (Covid-19).
“The speed and magnitude of the real estate recovery will also depend on the national government’s ability to roll-out the vaccines and rebuild the economy through the government’s monetary and fiscal policies as embodied in the Bayanihan to Heal as One Law,” it continued.
LRG said Metro Manila currently sees an 8-percent vacancy of office spaces.
It said that supply in the fourth quarter last year totalled 739,312 square meters (sqm), while available supply amounted to 313,533.17 sqm.
Meanwhile, 3 million sqm of office space supply are presently in the Metro Manila pipeline.
LRG said the business process outsourcing (BPO) industry led the demand for office space in Metro Manila at 41 percent.
This is followed by the gaming industry at 16 percent, while the remaining 43 percent is from other industries.
The group foresees co-working spaces to be a growing feature of the new normal with startup companies, freelancers, entrepreneurs, digital nomads and remote teams driving the demand.
The global flexible office market is expected to grow at a compound annual growth rate of 18 percent from 2020 to 2027, with Asia-Pacific considered as the fastest-growing region.
LRG said the average rental price of office spaces in Metro Manila is currently at P1,190/sqm.
It expects a 25- to 30-percent decline in rental rates beginning 2021.
“The lockdowns, which resulted in many business contraction and closures, the flight of many of the POGOs (Philippine offshore gaming operators) and the prevailing economic situation in 2021 a s a result of the Covid-19 pandemic are expected to increase office space vacancy rates and soften office demand in 2021,” LRG explained.
Townships became a popular location for offices, according to Lobien.
There are currently 80 township sites nationwide and 60 percent of them are located outside Metro Manila.
“Next Wave Cities will be the alternative investment hubs outside Metro Manila. These cities promote country-wide improvement, create job opportunities and economic advancement in their region,” LBG noted.
The 10 New Wave Cities are Baguio City, Cagayan De Oro City, Dagupan City, Dasmariñas City, Dumaguete City, Lipa City, Malolos City, Naga City, Sta. Rosa City and Taytay.
The office space vacancy rate in provincial business districts is at 18 percent.
In the fourth quarter, total supply in provincial office space was at 269,711.60 sqm and available supply stood at 219,184.69 sqm.
Average office rental rate in provincial areas is at P630/sqm.
As for the residential property market, LRG said condominium developers are expected to launch around 24,000 sqm of units this year.
Condominium take-up, on the other hand, is expected to amount to 36,000 sqm.