It seemed like the property market in the Philippines would get off to a good start this year. Despite ongoing sluggishness in the sector and a Covid-19 case tally of around half a million—the second-worst in Asia—transactions were beginning to increase as life returned to normal.
But as infections spiked in March, the government responded by imposing a second lockdown, limiting the mobility of millions in Metro Manila and nearby provinces and sending the property market back into its shell.
“The wave impacted the decision-making process for companies looking to take up office space. So they delayed their occupancy plans and rethought their requirements,” says Joey Bondoc, associate director for research at Colliers Philippines.
In the Philippines, where demand for office space is closely linked to the demand for housing, the second wave of infections has sparked questions over when, if ever, people will be back in the office.
In the first quarter of 2021, Colliers saw the completion of 199,900 square metres of new office space, with the Makati CBD and Bay Area (prime tracts of Metro Manila) accounting for 75% of new supply. Among the biggest projects launched were Ayala Triangle Gardens 2, a 40-storey office building by Ayala Land Inc., and the Armstrong Corporate Center, a 10-storey building comprising co-working spaces and private offices, both in Makati.
As the year got started, transactions in Metro Manila had reached their highest level since the pandemic started, driven by demand for office space among e-commerce, outsourcing and data companies, according to research by Colliers. But those gains ended abruptly with leases cancelled and renewals deferred as millions of people were urged to stay at home.
The sudden reversal of fortunes came as net take-up of office space remained negative for a fourth consecutive quarter. Some of the biggest losses came from business process outsourcing companies.
Online shopping has thrown a lifeline to many businesses during the pandemic and made staying at home that little bit easier. Filipinos look set to continue buying at the touch of a button long after the pandemic is over.
According to data from NielsonIQ, the country showed the most dramatic increase in online shopping in Asia, soaring 325%. The market research firm found that 67% of Filipinos who made online purchases plan to continue buying online even after quarantine restrictions are removed. “This signals a more permanent transition towards a brick-and-click shopping behavior where both formats influence the final purchase decision,” says Pauline Jill UyYu, NielsenIQ’s head for consumer intelligence in the Philippines.
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