Santos Knight Frank is predicting commercial real estate in the Philippines to rebound this year with the economic reopening sparking increased activity. The recovery will happen across the board with demand for space coming from the industrial and logistics; office; and data center sectors.
“We will see a much more robust level of activity in the real estate sector this year, especially in key sectors such as industrial & logistics, REITs, residential, and office,” Rick Santos, Chairman & CEO of Santos Knight Frank, stated. “We are particularly excited about prospects for data centers and renewable energy, which we predict will see high levels of growth over the succeeding years.”
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Commercial real estate in the Philippines moves forward
Starting with the office sector, Santos Knight Frank believes increased demand for outsourcing from overseas will lead to an uptick in take up. Meanwhile, existing firms are gaining a better understanding of what their office requirements are and have begun looking for space that suits those new needs.
“Office leasing activities have slowed down during the pandemic as occupiers tried to figure out their next moves. In 2022, we expect to see organizations make their real estate decisions, from expansion to right-sizing,” Morgan McGilvray, Senior Director of Occupier Solutions & Services, Santos Knight Frank. “The office is transforming from a place you ‘need to go’ to a place you ‘want to go’. This has important implications on how organizations will be selecting their new office spaces, implementing return-to-office programs, and reconfiguring their workplaces.”
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The industrial and logistics sector will be a key driver of commercial real estate in the Philippines this year as ecommerce continues to grow across the country. Demand for various warehouse spaces will increase once again while an undersupply of high-quality facilities is creating opportunities for developers.
However, data centers just may be the most exciting segment of the Philippine property market at the moment. Despite a greater dependence on technology and growing demand for co-location, internet and cloud services, the country lacks sophisticated facilities.
“The Data Center market is an exciting space for the Philippines. As the Data Center sector continues to grow alongside the increasing demand for data, we expect to see an upswing in activity for Data Center investments into the country,” Monica Gonzalez, Santos Knight Frank’s Data Centers Lead and Manager for Occupier Solutions & Services, explained.