One industry which has been hit by the COVID-19 pandemic is the property sector. With the lockdown and new normal regulations in place, particularly social distancing, many companies have decided to give up their office space/s and opted for work-at-home arrangements and many individuals have chosen to go back home than live in the more constricted spaces of their condo units. So what’s in store for 2021? Recently, the Lobien Realty Group (LRG) came out with their own research on the Philippine property outlook this 2021- and this is what they found:
1. Lobien Realty Group (LRG) believes that the worst is over with respect to the COVID-19 Pandemic
This belief is based on the existence of several high efficacy and safe vaccines that are now being rolled out in different countries-with the vaccination expected to start in the Philippines, in the second quarter of 2021.
2. LRG forecasts that there will be a 25-30% rental rates decline starting 2021
That’s because 2020 rental rates computations have not reflected the decrease due to the POGOs’ contractual agreements of about a year’s worth of security and advance deposits which protected the landlords’ rent income during the lockdowns and despite the numerous lease pre-terminations. The lockdowns, which resulted in many business contraction and closures, the flight of many of the POGOs and the prevailing economic situation in 2021 a s a result of the COVID-19 pandemic are expected to increase office space vacancy rates and soften office demand in 2021.
3. LRG envisages that co-working spaces will be a growing feature of the new normal in workplaces
Startup companies, freelancers, entrepreneurs and digital nomads, and remote teams drive demand for co-working spaces. At present, there are 110 Co-working spaces in Metro Manila. Total co-working spaces amount to 350,000sqm representing 9,786 total workstations available. The Asia Pacific region is considered the fastest-growing region within the global flexible office market due to the rise of co-working centers and other styles of flexible office spaces.
4. Townships will become trendy locations for offices
Having residential, entertainment, civic, recreational, and office spaces located close to one another appeals to many companies looking for leasable office space. Presently, there are 80 Township sites across the Philippines and 60% of them can be found outside Metro Manila.
5. LRG reports that condominium developers are projected to launch around 24,000 square meters of residential units to the market this 2021
While condominium take-up is expected to amount to 36,000 square meters. 2020 condominium pre-selling data on percentage of take up based on price range shows that 3% of condominiums priced below Php3M, 11% of condos priced between Php3M-Php7M, 45% of condos priced between Php7M-Php15M, and 41% of condos priced above Php15M.