PROPERTY developers that adopted a wait-and-see stance in the run-up to the national elections are back in business as new market opportunities emerge, according to a real estate consultancy.
In its report released Friday, Pinnacle Real Estate Consulting Services Inc. said the opportunities to address the supply-and-demand gap in property markets have roused developers from a ‘wait-and-see’ attitude since President Duterte was elected.
“The expected wait-and-see attitude is steadily giving way to taking advantage of the supply-and-demand gaps in the different sectors of the real estate market,” Pinnacle said.
“By now, the off-the-cuff remarks of President Rodrigo Duterte are not too different from that of President-elect Donald Trump of the United States,” Pinnacle said.
“Politicians, businessmen, and the people of both countries are slowly accepting the results of their respective democratic processes, even it may taste bitter to some groups,” the report added.
Apart from falling in the same cycle with the US elections, the report noted that the Philippines’ strong economic growth is a big factor enticing developers to take on new challenges.
In the third quarter of 2016, the Philippine gross domestic product grew by 7.1 percent, compared with 7.0 percent in the previous quarter.
“The continued economic growth of the Philippines, combined with a low interest rate regime, is compelling enough to trigger additional developments, provided proper market studies are done,” Pinnacle said.
“The office market is still a landlord’s market, and given the very high occupancy rates, rents have been increasing and albeit slightly in recent months,” Pinnacle said.
The initial fear of softening rental rates in the office market has been averted due to brisk demand for office space and the delayed delivery of office buildings due to lack of skilled workers. Similarly, the retail market remained strong, with the occupancy rates of malls healthy in the fourth quarter of the years, driven by the demand for the Christmas season.
“Occupancy of malls has always been healthy, and this in ‘malling’ season in the run-up to the Christmas holidays, every bit of commercial space will be leased out to take advantage of the shoppers’ propensity to spend,” Pinnacle noted.
Metro Manila’s residential property market continues to be dominated by condominium developments. “The estimated total number of condominium units will reach over 200,000 by the end of 2016,” Pinnacle said.
Manila and Quezon have been seeing substantial condominium projects in the recent years. Manila City condominium projects launched from 2009 to 2015 reached over 20,000 units, while Quezon breached the 40,000 unit mark in the same period.
“The BPOs and traditional companies will continue to look for office spaces; end-users and investors will scout for suitable residences; small retailers shall continue taking advantage of Filipinos affinity to shopping; tourists will continue to fill up hotel rooms and manufacturers will ceaselessly look for optimum industrial spaces,” Pinnacle said.
“As usual, savvy real estate developers will continue do their due diligence, and look for the unsatisfied demand, and supply the gap,” the report concluded.