Overcoming Philippine property doldrums

(First of two parts)

With investor preferences constantly evolving, developers should proactively cater to emerging trends.

Our latest briefing surveys indicate that employees are more effective when working in a traditional setup. This presents opportunities for developers to further promote the crucial role an office space plays for the general welfare and productivity of workers.

This also makes it an opportune time to integrate healthy and sustainable features into office buildings as these are another major “come on” for employees reporting onsite.

The results of our residential survey are also encouraging given that the preference for condominium units is now improving due partly to attractive ready-for-occupancy (RFO) promos offered by property firms. The take-up for house-and-lot and lot-only properties remains robust, supporting the shift to suburbia.

Meanwhile, physical mall space absorption across Metro Manila remains strong and this is complemented by Filipinos’ rising propensity to shop online. Among the most preferred items online include clothing and footwear, and groceries. This should encourage retailers and mall owners to improve Filipinos’ omnichannel shopping experience.

Sustainable features

It’s good to see that office tenants are now prioritizing green and sustainable features when looking for office space.

As Colliers Philippines previously highlighted, providing green, healthy, and sustainable office space is becoming popular, with landlords now taking advantage of demand from multinational companies and large Filipino firms highlighting sustainability.

This will likely be the norm moving forward. Occupying healthy and sustainable spaces will be pivotal in enticing employees to return to office (RTO).

More than 40 percent of our respondents said that sustainability is an important factor when looking for office space, while nearly 30 percent noted that green and sustainable features are critical and must be present when scouting for office space to rent.

Colliers estimates that around 1.1 million sqm of new office space are likely to be completed from 2025 to 2027, with about half of these spaces having green and/or sustainable certifications.

We encourage landlords to cash in on this rising demand, especially from multinational corporations that require their Philippine units to hold offices within sustainable office towers and to advance their parent firms’ adoption of sustainable development, and environmental, social and governance (ESG) practices.

Traditional office setup

Majority of our respondents said they are more productive under a traditional office setup.

Colliers believes that this presents tremendous opportunities for landlords to redesign and reimagine their office space to entice more employees to return to office. In our view, a traditional office set up also bodes well for the economy given the positive multiplier effects.

We continue to see shifts in stakeholders’ preferences and these should guide developers with their expansion plans in the near to medium term. The opportunities are endless for agile and proactive property firms.