Although the pandemic met Philippine real estate – as much as property industries worldwide – with substantial decline in office space leasing in 2020 and will continue to do so in the first quarter of 2021, the near future is looking just a little brighter, thanks to certain contributing factors aimed toward the rebound of the country’s economy.
According to Colliers data, office vacancy in Metro Manila was estimated at 9.1% in 2020 from 4.3% in 2019. It is further estimated that this rate of vacancy will continue to increase to 11.6% by the end of the first quarter of 2021.
This increase in vacancy has largely been due to gaming operators (POGOs) – one of the top industry drivers along with BPOs – vacating office space during the onset of the pandemic, and a collective number of traditional and outsourcing firms doing the same. Due to business losses and health, safety and economic uncertainties, businesses have been hesitant to return to commercial office spaces to continue operations.
With the prospect of an effective COVID-19 vaccine, however, which is aimed at being released during the second and third quarters of 2021, Philippine real estate, along with many other industries are hopeful that this will finally be the time to rebound from losses incurred in 2020.
Additionally, Colliers Philippines predicts that a major plank of economic growth for 2021 and the years to come will be the completion of infrastructure projects within and outside Metro Manila. The implementation and upgrade of railways, tollways and airports will greatly boost Philippine land and property value.
The government has set aside P109 billion for the transportation department and P667 billion for the Department of Public Works and Highways, which public projects will also make areas outside Metro Manila more accessible to potentially become business hubs, so that reliance on integrated communities can spread to wider areas, rather than being concentrated in Manila’s central districts alone. These public projects are foreseen to be beneficial to the economy beyond 2022.
Office landlords are advised to offer alternative leasing strategies to tenants, such as seat leasing, serviced office lease, or other more temporary leasing terms, and proactively provide assistance to those desiring to occupy vacated spaces accredited by the Philippine Economic Zone Authority (PEZA). These actions can further contribute to the rebound of businesses in 2021.
If you would like additional information and in-depth advice on Philippine office leasing, contact us at Ezy Outsourcing Hub. We are experts with years of experience in assisting businesses through our state-of-the-art serviced offices in prime business locations around the Metro. We can provide fully-furnished and equipped serviced office spaces with flexible payment terms, so that you can ensure fast and cost-effective business continuity and recovery, even through uncertain times. Contact us today.