IT-BPM firms remained a key driver in the property market in Q42021 by leading expansion activity and renewals, according to Janlo de los Reyes, Head of Research & Consultancy at JLL Philippines, during their Q4 Real Estate Market Overview webinar.
Resilient industries bolstered office space demand, with IT-BPM firms leading the way at 62.5% occupancy rates. E-commerce followed shortly after at 26%, with travel, transportation, and storage coming in at 18%.
Engineering services, real estate, healthcare and financial services, and government services rounded off the remainder of the demand.
The talk was held online on January 27 and featured market updates relevant to occupiers and investors, notable trends of last year, and JLL Philippines’ views on the future of Metro Manila’s real estate landscape.
Featured speakers included JLL Philippines’ Joey Radovan, Country Head; Janlo de los Reyes, Head of Research & Consultancy; P. Ryan Isip, Head of Capital Markets; Calum Swinnerton, Head of Property and Development Services; Carl Dizon, Senior Analyst of Capital Markets; Nix Garchitorena, Energy and Sustainability Manager; and Charlie McNaught, Director of Logistics and Industrial at JLL APAC.
Buoyant IT-BPM Sector Despite Pandemic
According to First Metro Investment Corporation (FMIC), the Philippine economy is expected to recover this year and resume its 6 to 7-percent growth trajectory after a two-year slump caused by the pandemic, as reported by Philippine News Agency.
Dr. Victor Abola, economist at the University of Asia and the Pacific, added that the IT-BPM sector is a key contributor to the resiliency and recovery of the economy in spite of the COVID-19 pandemic.
Abola says that the sector wasn’t limited to call centers, as the past two years has seen emergence of new segments in the industry, such as life sciences, healthcare, insurance, and data analytics.
The Bangko Sentral ng Pilipinas reported that BPO receipts are predicted to grow by 9% this year, which is higher than the previous projection of 5% back in September last year, according to an article published by PhilStar.
He noted that BPO earnings in the first nine months of 2021 grew by 8.3% year-on-year, which surpassed the central bank’s previous forecast for the entirety of 2021.
Leechiu Property Consultants (LPC) estimated that for 2021, local office property demand reached 539,000 square meters (sq. m.) compared to 2020’s 389,000 sq. m., as reported by Inquirer.
The agency’s data showed that the appetite for additional office space rose by 38 percent in 2021 from the previous year thanks to the IT-BPM industry, which was responsible for a 42.4-percent demand for new office space.
David Leechiu, Chief Executive of LPC, said that take-ups from these firms would have been higher if not for mobility concerns caused by lockdowns.
The Return to Physical Work Spaces
Improving infrastructure and the return to offices are further driving the growth of office space demand. Property seekers are slowly coming back to the National Capital Region as students resume face-to-face classes and employees report to physical office spaces.
This will likely continue as the Philippine economy stays open, lockdown restrictions are eased, and national vaccination programs remain in full swing.
This is in line with Lamudi’s recent trend report which saw a surge in demand for affordable residential rental properties and an increasing interest in homes that enable mobility, particularly those near central business districts and mass transportation hubs.
The top viewed cities in Metro Manila for the second quarter of last year were in key areas like Makati, Taguig, Quezon City, Pasig, and Paranaque. Properties in cities with proposed Metro Manila Subway stations also received plenty of attention on the platform.
According to BSP’s 3Q 2021 Consumer Expectations Survey (CES), a high percentage of consumers showed interest in purchasing real estate in 3Q amidst the easing of lockdown measures and declining COVID-19 cases.
These figures, coupled with the rise in property values and increase of housing loan applications are all pointing to the eventual recovery of the Philippine property market.
Sources: JLL Philippines, Philippine News Agency, PhilStar, Inquirer
Photo via DepositPhotos