Leechiu Property Consultants Inc. said Thursday the office market will continue to be a relevant segment of the real estate sector in 2021, as the economy begins to recover from the pandemic.
Office space take-up fell 70 percent in 2020 from 1.9 million square meters in 2019, said Leechiu Property president David Leechiu.
“I think the market will continue to hold in to office space. More companies now have realized difficulties of working from home experiment, but given the option they would go back to the office because one thing that’s missing is the human collaboration,” he said Thursday.
Office vacancy in 2021 would start from the spill-over of spaces vacated by Philippine offshore gaming operators in 2020 estimated at 300,000 sq. m. or about 20 percent of occupied office space, the company said.
Leechiu said that despite the pandemic, land values in certain portions of Metro Manila would continue to appreciate. He said land in the Bonifacio Global City was observed to have appreciated by 12 percent in 2020.
He said commercial and retail space also started to pick up as Jollibee, Shakey’s and Max’s and retailer SSI Group Inc. reportedly heightened operations.
“They’ve all been on uptrend since October, and they’re about 20-percent away from pre COVID levels. That’s a very good indication of our recovery. And then you’ve got domestic tourism already opening up a lot of local spots. Many are very eager to get out of the house and you’re seeing that in all tourism markets that have opened recently,” Leechiu said.
Leechiu said while the stock market contracted last year, real estate assets held their grounds and in certain cases appreciated.
“Even at the worst times of the economy, property prices have increased from the last transaction, pre-COVID. There are very few distressed sellers and a lot of buyers, a lot of money looking for distressed capital,” he said.
He said the firm was excited about the prospects of the business process outsourcing sector which is expected to continue to grow in 2021.
He said this is because offshore affiliates of US companies were expected to drive cost-cutting measures in most markets and this is seen to have positive impact on the Philippines and India.