Philippines office demand seen to pick up this year

MANILA, Philippines — Office demand in the Philippines is expected to pick up this year, with majority of the suspended deals over the last 12 to 18 months likely to be revived, a leading global real estate services firm said.

In a report, Cushman & Wakefield Philippines said despite massive exits from Philippine offshore gaming operators (POGO) throughout 2021 and pipeline supply approximating pre-COVID 19 levels in 2022 at 787,000 square meters, average prime and Grade A rents in key commercial business districts (CBDs) and urban centers are expected to reach trough in late 2021 through to early 2022, approximately 12 months earlier than envisaged at the start of 2021.

Claro Cordero Jr., director and head of research at Cushman & Wakefield Philippines, said corporate occupiers are also taking steps to rationalize their current real estate footprint and formulating future real estate strategies.

“In the Philippines, emerging asset classes such as data centers, horizontal residential developments and international grade logistics/warehousing facilities have also gained traction among investors seeking higher yields and/or lower volatility. All these asset classes, as well as new real estate investment trust (REIT) offerings in 2022, have strong growth outlook prospects and offer good diversification benefits,” he said.

These asset classes are expected to be increasingly sought-after amid a fragile economic recovery by the local investor community, Cordero said.