AS THE PHILIPPINES “goes bananas” in an election year—in the year of the monkey at that—property experts see a number of challenges, and likely trends, flavoring and coloring the real estate industry in 2016. Here’s their fearless forecast:
- There will be an oversupply in the mid-market vertical residential segment.
Soriano said that with this oversupply scenario, “we will naturally anticipate vacancy rates to go up in 2016 to double digits in the Makati and Ortigas CBD (central business district) area.”
- The 2016 presidential elections will affect the market. Soriano said the presidential and national elections “is likewise expected to freeze any major real estate activity in the first two quarters of 2016. Naturally, investor sentiment will be on a wait-and-see attitude. This will not bode well for the property sector and the economy as a whole. Hopefully, after the elections, it will be followed by a possible uptick in transaction levels in the last two quarters of 2016,” said Soriano.
- Business process outsourcing (BPO) growth continues. BPO companies, according to property portal Lamudi Philippines, will continue to buoy Metro Manila’s commercial real estate.
Philippines in a statement.
Soriano said that in 2016, Grade-A office rents in prime areas is expected to increase 5 percent, given strong demand for office space and low vacancy rates. Meanwhile, rents in non-CBD areas may slightly drop by 5 percent due to available supply in Makati and Bonifacio Global City.
- Metro Manila land values will go up. Lamudi Philippines said that despite slower gross domestic product growth in 2015, land values still continue to appreciate, albeit at a slower pace.
- Retail property market will face a slowdown. Soriano said “the challenging retail environment is likely to persist next year due to diminishing inbound tourist arrivals. We expect prime rents outside of the shopping centers to slide by 10 percent in 2016, while shopping mall spaces are expected to escalate.”
January 2, 2016/ By: Tessa R. Salazar/http://business.inquirer.net