Date: February 5, 2024
As we enter 2024, the real estate landscape in Manila continues to evolve, with sustainability at the forefront of development initiatives. Building on the successes of 2023, where the Philippines real estate market, particularly in Manila, reasserted its attractive status, this year promises exciting trends and opportunities. Manila's luxury residential market, in particular, demonstrated remarkable growth, outpacing global competitors and signaling a positive trajectory for the real estate sector.
Sustainable Real Estate Projects in Manila
The momentum of 2023 has set the stage for sustainable living spaces to take center stage in 2024. Noteworthy projects, showcase how developers are integrating cutting-edge green technologies to meet the rising demand for eco-friendly residences. These projects not only contribute to a more sustainable environment but also align with the global push for greener living.
The Rise of Sustainable Office Spaces
In tandem with the growth of sustainable residential spaces, the office sector in Manila is experiencing a surge in demand for sustainable workplaces. With a projected net take-up of 300,000 square meters in 2024, Manila is becoming a hub for environmentally conscious office spaces. Developers are urged to explore opportunities in second- and third-tier cities, responding to the sustainability thrust of various occupiers, including legal, engineering, government agencies, and flexible workspace operators.
Residential Developments Beyond Metro Manila
The expected delivery of 9,620 new condominium units in 2024, with a significant portion in Metro Manila's Bay Area, reflects the robust growth of the residential sector. Moreover, the trend is shifting towards resort-themed projects outside Metro Manila, encouraging a more diversified and sustainable approach to housing development. This move aligns with the increased accessibility brought about by ongoing infrastructure projects.
Ongoing Infrastructure Projects
The government's commitment to infrastructure development is a positive signal for the real estate market. The Philippines embarked on a significant infrastructure spending spree, resulting in 194 high-impact Infrastructure Flagship Projects (IFPs). Notably, the Unified Central Terminal in North EDSA is set to interconnect LRT-1 and MRT-3 systems, providing enhanced connectivity for residents. While some delays were experienced in 2023, the Department of Transportation remains optimistic about the Central Terminal's operations starting in early 2024.
Expanding Residential Offerings
As additional transport systems are introduced, Filipinos are increasingly drawn to residential areas near stations and terminals, leading to a surge in residential projects in cities like Quezon City. The shift from vertical to horizontal properties is noticeable, with developers upgrading their offerings to meet the demand for resort or leisure-themed projects outside Metro Manila.
Expats Reentering the Market
With the easing of COVID-19 restrictions, businesses are returning to normal operations, including the influx of expats returning to the Philippines. This resurgence is evident in the increased demand for premium units, with expats looking at properties within the range of P670,000 to P750,000 per square meter.
Challenges in the Real Estate Market
While the real estate market in the Philippines has seen substantial growth, challenges persist. Rising property prices are a concern for Overseas Filipino Workers (OFWs), who are a crucial market segment. OFWs are showing interest in property ownership, with a focus on affordable housing in the range of P2.5 million to P7 million for a low/mid-income condominium unit.
Office Space Trends in 2024
Beyond residential properties, the Philippines anticipates increased demand for office and hotel spaces in 2024. Developers and leasing agencies should take note of the upcoming trends in the real estate sector, with Colliers estimating a take-up of 300,000 square meters, an 80,000-square-meter increase from 2023.
Demand for Quality Office Options
Flight-to-quality strategies employed by many Business Process Outsourcing (BPO) firms are influencing the demand for office spaces in key CBDs like BGC, Makati, and Ortigas. The interest in these areas is driven by a desire for safer and more secure markets, with high-quality spaces available at relatively lower costs compared to other markets.
Emerging Cities in Focus
Developed provinces such as Pangasinan, Nueva Ecija, Palawan, and General Santos are expected to witness increased office space inquiries in 2024, as more companies tap into the potential of lower-cost yet effective labor pools in these areas. This trend aligns with the growing digitization of cities outside Metro Manila.
Seesawing Rents and Vacancy Rates
While CBDs like BGC, Ortigas, and Makati continue to thrive, other areas such as the Bay Area and Alabang are experiencing fluctuations in rents and higher vacancy rates. Factors like changes in regulations and shifts in business dynamics have contributed to these variations.
Manila's real estate market in 2024 is poised for sustainable growth, marked by eco-friendly living spaces, increased infrastructure development, and a diverse range of residential offerings. Challenges, such as rising property prices, are being addressed, and the market is adapting to the evolving demands of expats, OFWs, and businesses. Developers and stakeholders should stay vigilant and flexible in response to the dynamic real estate landscape in the Philippines.