Research & Forecast Report 1Q 2017

We are pleased to announce that the 1^st quarter 2017 property market report is now available.

Commercial real estate services company Colliers International, in a recently released report, identified key issues and opportunities in the Philippine property market particularly in office, residential, and retail segments.

Metro Manila office net take up reached 81,400 sq m of gross leasable area (GLA) for the first quarter of the year, as vacancy remained low despite new completions. Pre-leasing is still strong with over 40% of buildings due in 2017 leased out. A significant shift in tenant mix was seen with BPO share representing only 21% of total transactions, down from 60% in 2016. For the latter part of the year, Colliers expects the market to sustain this diversified portfolio with a potential rebound from BPOs as occupiers get a clearer view of government policies both locally and overseas.

Completion of residential condominium projects for the first three months of the year picked up after a sluggish 1Q 2016. Colliers sees about 22,000 additional units being completed this year in the major business districts, with the Manila Bay Area accounting for two-thirds of the new supply. While rents in major CBDs are declining, prices continue to grow albeit at a slower pace. The demand for luxury units is stable and this encourages affordable and mid-income developers to pursue high-end projects especially in the Manila Bay Area, where the demand for luxury projects has spilled over.

Overall vacancy in Metro Manila rose marginally due to the closure of a number of luxury fashion outlets in a couple of district and neighborhood malls. At present, fast fashion and food beverage sustain retail take-up in Metro Manila malls. Amid increasingly generic retail offerings, curation of retail concepts and tenant mixes is becoming more important. Colliers believes that developers need to gear toward a more lifestyle-oriented tenant mix to survive in a highly competitive retail landscape. Developers should future-proof their businesses by cashing in on the increasing popularity of online shopping and being more aggressive in acquiring logistics and warehousing businesses.