The Philippine real estate market showed a remarkable resurgence in the first half of 2024, fueled by a robust rebound in the hospitality sector and surging demand for office space, according to Santos Knight Frank (SKF), a leading global real estate services firm.
“The Philippine real estate market is nearing pre-pandemic levels. Strong demand across commercial and residential sectors signals a promising future,” said SKF chairman and chief executive officer Rick Santos.
Hospitality boom
The hospitality sector is booming, with 2024 on track to be a record year for new hotel openings. In the first half alone, five new hotels partially opened, adding over 2,900 rooms to the market upon full completion.
Upcoming openings in the second half of 2024, including Somerset Valero Makati, Seda One Ayala and Ascott DD Meridian Park, will bring nearly 900 additional rooms.
The tourism surge isn’t limited to Metro Manila as popular destinations like Cebu, Davao, Palawan, Subic, Baguio and Cagayan de Oro are also witnessing significant growth in hotel projects, according to SKF.
Office sector resurgence
Office demand in Metro Manila more than doubled in the first half of 2024, exceeding the total net absorption for the entire 2023.
“Return-to-office mandates and office expansions, supported by offshoring operations, have led to a doubling of demand in the office market, surpassing 2023’s take-up in Metro Manila. We expect this to continue as the Philippines remains to be one of the most competitive offshoring hubs in Asia-Pacific driven by a young talent pool, affordable operating costs, and a robust supply of office spaces,” Santos said.
Taguig emerged as the preferred office location, boasting a lower vacancy rate of 14.5 percent than Metro Manila’s average of 18.9 percent.
Makati commands the highest average asking rent at P1,256 per square meter a month and is closely followed by Taguig at P1,250/sq. m./month.
Luxury market
The luxury residential market is pushing boundaries, with new developments like Park Villas in Makati City and Banyan Tree Residences Manila Bay in Pasay City approaching a selling price of P1 million per sq. m.
This trend positions Manila to join the ranks of global cities with a super prime market-areas with projects commanding at least $10 million per unit.
Meanwhile, strong demand and limited availability in Manila’s prime villages continue to drive capital appreciation. Forbes Park and Ayala Alabang lead with a 13-percent increase, rising from P 580,000 per sq. m. and P250,000 per sq. m., respectively in 2023.
Dasmariñas Village and Magallanes Village also saw significant growth, each with a 12-percent increase.
Mall redevelopment
Mall redevelopment projects are underway across Metro Manila, with a focus on efficient resource use and experiential offerings. These renovations aim to keep brick-and-mortar retail relevant in the face of growing online shopping trends.
Ongoing redevelopment projects include the transformation of Robinsons Forum and Greenbelt 1. Trinoma, Glorietta and Greenbelt 2 are amid renovations and improvements, while plans are underway for Shangri-La Plaza, Market! Market!, SM Megamall and other yet-to-be-confirmed SM malls.
Meanwhile, the industrial sector is expanding beyond Metro Manila, with activity concentrating in the southern provinces and Clark. Logistics remains the primary driver, alongside growth in emerging subsectors like semiconductor, pharmaceutical, and electric vehicle manufacturing.
Looking ahead
The Philippine real estate market’s robust performance in the first half of 2024 indicates a bright future.
“In general, we are optimistic that the market is almost close to pre-pandemic levels. The robust demand across commercial and residential sectors indicates a promising outlook for Philippine real estate,” Santos said.
With continued growth expected in the hospitality, office, residential and industrial sectors, the market is well-positioned for sustained success.
