Colliers International Philippines encouraged property developers to expand in strategic locations outside Metro Manila, as demand for new office space shifted to the countryside.
Based on Colliers Q1 2021 Metro Manila Property Market survey, lessees are expanding outside Metro Manila, providing an opportunity beyond 2021 for office developers in the provinces.
About 75 percent of respondents chose Pampanga, Laguna and Cebu for their post-COVID leasing plans.
Colliers said this provides an opportunity for provincial developers looking to tap pent-up demand for office space beyond 2021. The firm recommends that developers further explore opportunities to build office towers in these areas.
Colliers also noted that outsourcing firms continued to occupy office spaces outside Metro Manila. Among the firms that took up office space in the first quarter were Legato and Teledirect in Iloilo, 24/7 InTouch in Cebu and TaskUs in Batangas.
“Given the government’s plan to lure more companies to occupy space outside the capital region, we see more firms locating outside of Metro Manila as they take advantage of tax and non-tax incentives offered by the government,” Colliers said in its report.
It said retailers and mall operators were also aggressively expanding their online presence.
“We recommend they be quick in capturing new trends in the market influenced by a lockdown and a household consumption-driven economy including repositing assets to logistics use to support rapid, last-mile deliveries,” it said.
Colliers said that in the residential market, many buyers remained interested to acquire house and lot and lot only projects in key urban areas outside Metro Manila.
The report found that COVID-19 raised the demand for horizontal projects outside Metro Manila. The shift is partly attributable to the completion of infrastructure projects such as toll roads that improve connectivity between Metro Manila and key urban areas in northern and southern Luzon, it said.
Remittances from Filipinos working abroad reached $33.2 billion in 2020, nearly unchaned from $33.5 billion in 2019, despite the global economic crunch. These funds will likely be the major driver for horizontal projects.
Colliers said that in the retail segment, maximizing technology and online platforms would be crucial for retailers to fulfill last mile and same day deliveries.
“In our view, the retail segment will likely continue to see disruption as Filipinos continue to shop online and focus spending on essential items such as food and beverages. Colliers believes that the strict quarantine protocols are among the factors pushing consumers to prefer subscription-based delivery programs. Colliers believes that online shopping will likely continue to thrive even post-COVID,” it said.