Knight Frank, the world’s largest independently owned property consultancy, remains optimistic in the growth of the Philippines’ commercial real estate sector as the country’s economy is set to expand by 6.7% this year.
The property industry continues to benefit from the economic boom, creating a positive ripple effect across each sector, according to Santos Knight Frank, the group’s partner in the Philippines.
In the remaining months of the year, an additional 1.47 million square meters of prime office spaces are expected in Metro Manila, representing 30% of the current stock. The business process outsourcing industry continues to drive demand along with new entrants from the Chinese online gaming sector, resulting to an overall decline in vacancy rate from 4.9% in the first quarter to 4.5% in the second quarter of the year.
Meanwhile, the retail real estate sector is also expected to add around 500,000 sqm of space this year after local consumer spending rose by 5.6% spending during the first quarter of 2018. With greater consumption activities, the industrial real estate sector has subsequently seen rising demand for storage and warehouse facilities.
Rick Santos, Chairman & CEO, Santos Knight Frank comments: “The commercial real estate sector in the Philippines is still one of the hottest markets for investors, including the U.S., China, South Korea and Asia. The rest of the year will see greater activity in the market as buyers and investors capitalize on the growth of secondary cities, improving infrastructure and strong fundamentals.”
Alistair Elliott, Senior Partner & Group Chairman, Knight Frank reaffirms the company’s optimistic view during his visit to Manila. He says: “Our partner, Santos Knight Frank, recently brokered the largest office lease in Philippine history — a 70,000-sqm deal between JP Morgan Chase & Co and Megaworld in the Bonifacio Global City. This speaks a lot about the level of confidence in the country’s real estate market and Santos Knight Frank’s leadership position in the commercial office leasing sector. This is my first visit to the Philippines and all I have seen reaffirms the outstanding choice that my firm made in partnering with Santos Knight Frank.”