The real estate market is currently facing unique challenges due to unprecedented factors like the global pandemic, geopolitical tensions, and rapid technological advancements. Despite these challenges, established CBDs remain resilient, and the diversification into multiple sub-markets offers new opportunities. Looking ahead, sectors such as technology, healthcare, and logistics are expected to drive demand, supporting a gradual market recovery.
Office
Absorption rates have improved from pandemic lows but remain influenced by flexible work trends and corporate policies. Some companies are mandating a return to office, impacting office space demand. Developers are cautious with rental offers, and new office stock is more dispersed outside traditional CBDs.
Residential
The residential segment shows a disparity between high-end and mid-end markets, with a mismatch between supply and buyer preferences causing unsold inventory. Developers struggle with high input costs and slowly adjusting prices, leading to elevated vacancy rates.
Retail
In the retail sector, there's a strong emphasis on enhancing the consumer experience. Despite global market uncertainties, the Philippine retail market remains highly attractive, attracting interest from international brands. The recovery trajectory will vary across different districts, with prime shopping centers anticipated to stabilize first due to their adaptability and ability to reinvent themselves.
Hospitality
The hospitality segment is seeing uneven regional recovery due to untapped potential in various tourist destinations, including the Philippines. In Metro Manila and other areas outside the Philippines, branded developments are expanding, indicating a shift towards quality over affordability.
Logistics and Industrial
The logistics and industrial sectors remain robust, driven by increased automation needs and digital economy growth, though quality issues persist. Data centers present opportunities for expansion amid growing digitalization demands but face challenges with sustainability and local regulations.
