Some real estate pundits are still “betting their last centavo” on the beleaguered industry’s recovery amid the effects of the COVID-19 pandemic, and corresponding community quarantine protocols that go with it.
“It should be business as usual for [property] investors,” said Professor Enrique Soriano III, Wong + Bernstein Advisory Group’s executive director, in a recent interview. For those interested in investing in property, “managing the risk as a result of the current uncertainty is the only hurdle for property players to overcome,” he averred.
Soriano’s bullish view shines amidst the lowered local GDP forecasts by economists (like those from the UnionBank of the Philippines) and global firms (such as JP Morgan Chase and JLL Global), because of fluctuating real estate investment.
Industry observers pronounced the local real estate market as decidedly resilient, with the large unmet demand for housing a major contributing factor. It is seen to continue being a local, long-term play with attractive relative returns compared to other asset classes.
“Behaviorally, in any downturn, the real estate market will naturally correct itself,” Soriano explained. “The upside is clear: it is a very resilient sector struggling to cover more than 6 million housing units; all these housing requirements are based on real demand,” he added.
Commercial real estate poised for comeback
A Cushman & Wakefield report picked commercial real estate as the most resilient sector, owing to the long-term nature of properties that will allow losses to be regained sooner than later.
Real estate services company Santos Knight Frank (SKF) identified key trends that would help shape the industry as a whole throughout the year. These include office-sector-driven growth, mainly from the BPO sector as it expands within and outside the metropolis.
Real estate companies like AboitizLand continue to prepare for this expected upswing with integrated townships such as LIMA Estate in Lipa, Batangas, where it plans to develop commercial buildings and sell commercial lots in its upcoming business district.
The industrial and logistics sectors are also seen to expand outside Manila with the increasing demand for warehouses and distribution centers, especially as e-commerce booms. The hotspots for expansion are seen to be CALABARZON, Cebu and in the NLEx-SCTEx-TPLEx corridors in North Luzon.
AboitizLand remains prepared for this inevitable expansion amid the pandemic with industrial hubs like LIMA Technology Center in Batangas, and MEZII and West Cebu Industrial Park (WCIP) both located in Cebu. Plans are underway for LIMA and WCIP expansions to create additional inventory to take advantage of this demand.
Homebuyers deep in the hunt
Opportunities are also present for homeowners looking to invest in, live in and rent out properties. With buyers wary of current stock values, relatively stable real estate investments are becoming more attractive.
According to SKF, real estate investment trusts or REITs, which may help democratize the Philippine property market by allowing smaller investors to participate in high-value real estate assets, are seen to pick up this year.
Environmentally-conscious developments will also become more attractive to people who look towards low-density areas that offer house-and-lot type properties with green, open spaces.
Best-of-both-worlds developments that are located away from Metro Manila cities are eyed as the best in this area. AboitizLand developments such as Seafront Residences, The Villages at Lipa in Batangas, and Ajoya, a mid-market horizontal development in progressive areas in Central Luzon, are examples of these developments.
For those opting for the bustling city, Metro Manila remains to be a prime residential market especially with the rising popularity of co-living spaces. Micro-studios, such as Point Blue Microstudios will increasingly become the accommodation of choice for employees and young professionals who work in CBDs but require the cozy privacy of a studio.
Real estate bounce-back
Colliers International Philippines noted that high demand and low interest rates will benefit the residential market greatly once things go relatively back to normal,.
The general consensus from various other sources? Buy property now versus when economic recovery from COVID-19 begins. People with cash on hand, especially, could benefit from being able to negotiate for better, discounted prices on select properties.