By: The Manila Times
DESPITE high demand, the real estate sector will start 2023 with a careful, but hopeful tone as uncertainties remain, Property Consultant Company Leechiu (LPC) said.
LPC Director for Commercial Leasing Mikko Barranda, and Research and Consultancy Director Roy Amado Golez both stated this in a presentation at the Nordic Chamber of Commerce’s annual meeting on Monday.
According to them, the current situation will be caused by persistent headwinds and uncertainties coupled with consistent demand, and upcoming real estate supply for this year with various projects up for completion.
According to them, the current situation will be caused by persistent headwinds and uncertainties coupled with consistent demand, and upcoming real estate supply for this year with various projects up for completion.
“From what we have heard from developers, they are seeing various buyers backing out, especially the OFWs (overseas Filipino workers) in the last four quarters, because of increasing interest rates, inflation and the usual headwinds. Developers are also worried about rising costs, which have caused them to hold back new projects as they wait for inflation to stabilize,” he added.
He, however, said that demand is expected to continue despite current conditions, presenting an opportunity for developers as inflation settles down.
“In terms of units sold within the last three quarters, we are seeing a positive growth in pre-sales which is more or less a ‘recovery period.’ In fact for residential condominiums for example, there may be 180,000 units in the pipeline for the next few years, but only 46,500 are left unsold as many of those units have been bought,” Golez said.
For his part, Barranda said that despite office building transactions going strong coming in 2023, there will still be plenty of office space supply coming in as various office projects are completed.
“For 2022, we almost reached 1 million in square meters (sqm) for office leasing demand higher than 2020 and 2021 combined,” Barranda stated. “Moreover, there are about 352,000 sqm of live leasing requirements which will be carried over in 2023 courtesy of the IT-BPM (information technology-business process outsourcing) sector.”
“However, we are still cautiously optimistic as there are still 18 percent of Metro Manila vacancies and in addition to this, an anticipated pipeline of 982,000 sqm in office space in 2023,” Barranda added.
Barranda said that overall, the office real estate demand for the year will continue to flourish as the IT-BPM sector and new businesses, such as health services, will continue asking for space.