KMC Savills, the country’s leading real estate brokerage and consultancy firm, forecasts office market net absorption in Metro Manila to slightly increase in 2023, however the increase is expected to be isolated in the top submarkets.
During its first market briefing held February 22, 2023, KMC Savills senior research manager Fredrick Rara announced that the 2023 outlook is a continuation of the rebound in 2022 that closed at a net absorption of 270,900 square meters (sqm).
In the industrial and logistics sector, the consultancy firm noted a supply shortage of high-quality facilities on the assumption that no additional completions will take place. Based on the firms’ research data, vacancy rate for industrial and logistics is forecasted to drop to 6.9 percent in 2023 from 7.8 percent in 2022.
In the residential market, only the high-end to luxury segments are seen to be resilient to market uncertainties and property developers are encouraged to take advantage of this. There are also opportunities for middle market developers in the commercial business districts (CBD) fringes and areas near universities given the return of workforce and students on-site.
KMC Savills said OFW remittances continued to support growth, but the stellar performance by the BPO sectors is expected to exceed remittance contribution in the near future. However, in the short term, the firm forecasts interest rate hikes by the BSP to weigh heavily on households on top of inflation.
KMC Savills expects the market to prioritize liquidity this year and focus on unlocking the value of their portfolio. Overall, KMC Savills still sees positive gains in Philippine real estate in the face of higher interest rates after a decade of loose monetary policy.