Philippine real estate is expected to continue its recovery in 2023 as part of a greater economic rebound but global management consulting firm McKinsey & Co. believes new opportunities exist for the sector that will require developers, agents and other stakeholders to rethink their approach.
It is an interesting time for Philippine real estate as a whole. A young population eager for home ownership has created a housing shortage in many areas of the country. Meanwhile, demand from Business Process Outsourcing companies combined with the shift to hybrid working arrangements has forced the office sector to rethink what tenants need.
According to McKinsey & Co., developers must be willing to adapt and embrace innovation to unlock new opportunities for Philippine real estate that do not currently exist. The firm cited a reinvention of office spaces, utilizing modern construction techniques and the creation of flexible leasing agreements as possibilities.
A few examples of developers tapping into these new opportunities were seen last year. For example, data centers have gone from an afterthought to one of the country’s fastest-growing real estate segments.
The country’s current data center capacity is at 94 MW, but more is set to come online. Santos Knight Frank expects an increase of up to 200 MW of additional capacity coming from confirmed projects in the pipeline.
Elsewhere, developers like Filinvest Land have embraced new technologies and design concepts that provide residents with a greater connection to nature. Advancements such as Venti-lite, a technology that allows natural light and fresh air to flow throughout a building, resonate with today’s homebuyers and make residential projects more attractive.
This isn’t to say developers need to abandon what is currently working. With the country expected to record economic growth over the next few years, firms must balance the success of now while exploring new opportunities across the Philippine real estate sector that could unlock future growth.
Read More: Santos Knight Frank excited about the prospects of retail, hospitality and office real estate