Santos Knight Frank expects steady rebound for the Philippines’ real estate market in 2021

Industrial and logistics strengthen, while office and residential sectors slowly recover 

The Fort Bonifacio skyline in front, with the main building clusters of Makati skyline – Ayala, Kalayaan, and, Rockwell – at the back. MichaelDEdwards/Shutterstock

According to Santos Knight Frank, the Philippines’ property market is predicted to exhibit a soft rebound in 2021 after a challenging year, with key sectors – industrial and logistics, office, and residential – demonstrating signs of economic recovery.

The industrial and logistics sector was the most stable field last year, and its performance is likely to repeat in 2021 due to demand for COVID-19 vaccines, new infrastructure, and increased e-commerce. Data centres show a long-term opportunity for the country and the sector, while warehouses, cold storage facilities, and distribution centres will be highly sought-after.  

Despite a positive outlook for the office market this year, it is improbable that its performance will arrive back at pre-pandemic levels. As COVID-19 is further contained, tenants will start to return to the physical workplace, gradually recovering the sector.  

Santos Knight Frank believes that tenants, particularly BPO companies, will proceed to find new locations for expansion and office rightsizing requirements. The greater vacancy of fitted space and prime office space poses a golden opportunity for companies searching for better locations. 

The residential market will recover at a slow but steady pace. Santos Knight Frank expects opportunities for homebuyers with better deals in terms of price and payment terms. Many developers have extended flexible payment schemes to increase demand, while banks have proposed competitive interest rates to encourage investments. 

In terms of capital markets, Santos Knight Frank anticipates intensified activity via the listing of more REITs (Real Estate Investment Trusts) to stimulate the capital markets and drive property investments.  

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Rich Santos, Chairman & CEO of Santos Knight Frank, said, “2020 was a challenging year for Philippine real estate and the global property market, but we see the new year as a promising time for real estate sectors such as industrial & logistics, office, residential, REITs, and data centresamong others. In general, we expect to see a soft rebound in the real estate market as the economy gradually recovers.”  

“In 2021, macrotrends such as the boom of e-commerce, flexible office setups, and continued decentralisation outside Metro Manila are likely to continue and contribute to the property market’s recovery. In addition, the demographics of the Philippines remain key in driving the real estate market’s long-term performance. The country’s growing population will drive consumption, online retail, and the industrial and logistics sector, while its young pool of talent will help retain the Philippines’ place in the global BPO industry as outsourcing increases overall,” Santos added.