PH Property Sector Expects Continued Recovery

The Philippine property sector is predicted to maintain its growth this year as business process outsourcing (BPO) firms drive demand for office space mentioned in Colliers.

“For office, we are very positive. In fact, we are projecting positive net take-up. That means that the occupied spaces will outpace the vacated spaces,”  said Colliers Director for Research Joey Roi Bondoc.

Colliers predicts that by 2023, net take-ups can reach 228,000 square meters for offices. In 2022, net take-up hit 110,500 square meters, which was a turnaround from the negative take-ups in the last two years.

For Colliers, the office vacancy rate is expected to shoot up by 20.2% from the new office supply and muted take-up in upcoming buildings. For Q4 of 2022, the vacancy rate hit 18.8%.

Despite companies having a work-from-home or hybrid setup, there was still significant demand from BPO firms, specifically from the healthcare service sector.

“And what we were positive about really is the office take-up outside of Metro Manila. They are now not just looking at Metro Manila as an ideal office location, they are expanding to Pampanga, Cebu, and Davao, among others,” mentioned Bondoc.

“For the property sector in general, we need to keep an eye on interest rates… If interest rates further increase it can stifle the expansion plans of locators here in the Philippines,”  added Bondoc.

Last year, the Bangko Sentral ng Pilipinas (BSP) increased key interest rates by 350 basis points (bps). This would mean an increase of 5.5% which is the highest in the last 14 years.

Source: Business World