Real estate consultancy firm Colliers is cautiously optimistic in the growth for office space and residential condominium but is sanguine for the hotel and retail sectors, especially with the expected strong growth in global travel.
“There has been recovery in the Philippine real estate sector, turning the corner in the first half of 2022 and we expect this recovery to continue this year.”
Joey Roi Bondoc, director of research at Colliers
A surge in tourist arrival, projected by the Department of Tourism to rise to 4.8 million this year from 2.6 million in 2022 and the growing market for staycations, said Bondoc, will keep hotel occupancy rates high even with the expected increase in hotel room supply.
Higher consumer spending, some tax cuts, and workers return to office driving foot traffic in shopping malls should fuel growth in the retail sector, he said.
Kevin Jara, Colliers’ associate director for office services—tenant representation, said in the same forum, however, that the growth outlook for office space demand remains muted, with increases in rental rates likely to be tempered by still high vacancy rates.
Jara said the transfer of some business process outsourcing companies to the Board of Investments from the Philippine Export Zone Authority to facilitate work-from-home arrangement is also a concern since it could moderate demand for office space.
While there have been strong take up for luxury condominium in 2022, Bondoc said the challenges for the sector includes prospects to elevated interest rate, the risk of global recession, inflation still remaining high, and increased cost of construction materials.
“But definitely not everything is doom and gloom” for the residential market, said Bondoc, noting economic growth could rise 6%-7% this year while overseas workers remittance should rise further this year.
