Q1 2023’s convergence of market dynamics offers Crown Asia a favorable opportunity to highlight its advantages and seize new ones, while reinforcing its leadership position in the Philippine real estate sector. The hotel sector in the Philippines is thriving, with foreign arrivals surpassing the Tourism department’s target for 2023. The domestic market is also experiencing growth, with the leisure sector projected to reach 65% occupancy by the end of 2023. The government’s efforts to improve transport infrastructure and modernize airports are expected to support hotel developers. The industrial sector is also experiencing growth, with record-high investment pledges in the first half of 2023. Sustainable and green buildings are expected to account for 56% of new office buildings from 2023 to 2025. The Philippines’ real estate industry has shown resilience despite economic shifts, international ties, and the global pandemic.
The residential and commercial space markets have grown steadily, with progress persisting in the final months of 2023. Both international and domestic business groups express optimism for the market’s resurgence, with leading companies like Ayala Land and Megaworld Corp. reporting significant increases in real estate project launches. The commercial space sector is also showing signs of a shift, with office spaces in Metro Manila experiencing a slight YoY decline in vacancy.
The upsurge of remittances is expected to increase land property acquisition in the Philippines, with this trend expected to continue until the first quarter of 2024. Both residential and commercial property investment by local and international buyers is expected to increase in the latter half of 2023, with office space vacancy decreasing by 43% in the first half of 2023.
Discussing the Real Estate Industry’s performance in 2023
Hotel Industry
One of the most active real estate markets in the nation is still the revitalized hotel industry. The tourism department’s 2023 objective for foreign arrivals is probably going to be exceeded while the domestic market keeps driving up daily rates and occupancy. The need for meetings, incentives, conferences, and exhibitions (MICE) facilities has also been bolstered by the return of business travelers and in-person corporate events.
Colliers thinks that with a record-high supply of new keys in 2023, the strengthened leisure sector will only grow further. To optimize the return on in-person events, stakeholders can take advantage of opportunities by expanding the number of MICE facilities they build, creating new hotel brands domestically or acquiring international ones, and coordinating their programs and services with the Tourism department‘s updated strategy.
Industrial Sector
In the first half of 2023, investment promises to the Philippines reached all-time highs. This is good news for the Philippine industrial sector because, over the following 12 to 24 months, these projects are probably going to require warehouse space and industrial space. The Philippines’ competitiveness as an Asian manufacturing powerhouse should be further enhanced by the ongoing development of developers’ industrial footprint, which is drawing investors to industrial parks located in central and southern Luzon.
Tourism: Domestics & International Flights
Due to the completion of new office buildings and a spike in vacant spaces in the third quarter of 2023, Metro Manila saw a slight increase in office vacancy. Colliers are still recording agreements from outsourcing and traditional firms while combining flight-to-quality and flight-to-cost metrics.
Office transactions outside of Metro Manila saw flattish growth for the first nine months of the year, with the majority of closed transactions occurring in Cebu, Pampanga, and Laguna. As residents make the most of the skilled labor pool and expand the infrastructure network in second and third-tier cities, we anticipate more growth prospects in strategic locations outside of Metro Manila.
Colliers thinks that because of the current state of the market and the reduced rents brought about by the pandemic, there are still opportunities for tenants to adopt flight-to-quality measures at a cheaper cost. We believe that this is a great time to reserve space in areas where there is a significant supply of brand-new, high-quality office space. We advise tenants to investigate office spaces in Ortigas CBD and Fort Bonifacio, given the present stock of vacant spaces and the upcoming completion of new office towers over the next 12 months. Occupiers may also take into consideration flexible workplaces as part of their flight-to-value strategy. Given our continued optimistic outlook for 2023 and 2024, Colliers advises occupiers to reevaluate their real estate plans well in advance of their lease expiration to capitalize on the market’s high vacancy rate.
BusinessWorld believes that one real estate market sector that stands to gain from the government’s efforts to upgrade transportation infrastructure is the leisure industry. The countrywide developers of hotels should benefit from the upgrading and growth of regional and international airports. Furthermore, with the paving of roads, lower utility costs, and the customization of warehouses and associated services, master-planned communities that provide industrial spaces and warehouses will continue to be appealing.
Examining the Philippine Real Estate Market’s Situation in Q4 2023
One of the most thriving sectors in the Philippines is still real estate, which has shown remarkable resilience in the face of numerous setbacks caused by changing economic conditions, the expansion of international relations, and even the global pandemic. The Philippine markets for both residential and commercial space are expanding steadily, as seen by their outstanding performance in the first quarter of 2023 and their continued progress into the latter few months of the year. As the Philippine real estate market grows and turns a profit, it is important to monitor the situation of this sector.
International and domestic business groups are optimistic about the Philippines real estate market, as said in an interview with the Manila Times. Leading Philippine real estate firms Ayala Land and Megaworld Corp. both report significant increases in the number of real estate projects launched, according to the Manila Times, and global real estate management company Colliers International is still optimistic about the recovery of the Philippine real estate market. The market keeps growing and making more money throughout the last quarter of 2023 because of the ongoing projects that are being introduced in the nation.
“The country manager of DoT Property Philippines mentioned in the Manila Times interview that the business has been growing as a result of the revisions, and several projects are happening left and right. A number of them have been collaborating with us on campaigns, and numerous projects have been released every month,
There are indications of a significant change in the commercial space segment of the real estate business as the nation moves forward with readjusting to the “new normal” following the pandemic. Office space in the Philippines, especially in Metro Manila, saw a minor but significant YoY decline in vacancy in the latter half of Q3 2023, according to data released by international real estate services firm Cushman & Wakefield. This development is anticipated to continue in the last quarter of the year. The purchase of land in the Philippines is anticipated to rise dramatically as a result of the remittance boom that is anticipated to reach the nation in Q4 2023. This encouraging trend is anticipated to last until the first quarter of 2024.
Real Estate Trends’ Changing Effect on Construction Supply Retail in 2023
As 2023 approaches, the retail construction supply market and the real estate sector remain significantly shaped and redefined by their interconnection. Not only is this complex relationship fundamental, but it also reflects the dynamic changes and trends that have been observed in these industries.
Demand Variations and Market Dynamics
The health of the real estate market has a significant impact on the retail construction supply market. Even in times of fluctuating market conditions, the need for building supplies is dependent on the health of the real estate sector. The demand for construction supplies has increased in 2023 due to an increase in infrastructure projects, commercial developments, and home construction projects.
Economic Repercussions and Supply Chain Difficulties
The economic environment, which is characterized by shifting material prices and interruptions in the supply chain, is still having an impact on both sectors. Supply chain issues are still present in 2023, which has an impact on the cost and accessibility of building materials. The procurement process has become more complex due to factors including shortages of raw materials, transportation problems, and disruptions in the global supply chain.
To overcome these obstacles, building companies and real estate developers are diversifying their sources of supplies, looking into nearby options, and using more effective inventory control procedures. Notwithstanding these obstacles, creative approaches and cooperative efforts among supply chain participants are surfacing to lessen these effects and guarantee a consistent supply of building supplies.
Accepting the Digital Revolution
The retail construction supply market has been affected by the digital revolution that is sweeping the real estate sector. Online stores, online marketplaces, and e-commerce platforms are becoming more and more common ways to buy building goods. Retailers may now engage with a larger customer base and enjoy ease, transparency, and a greater reach thanks to this trend towards digital media.
Additionally, in the retail construction supply industry, data analytics and AI-driven insights are transforming customer engagement tactics and inventory management. Retailers can increase consumer happiness by optimizing stock levels, anticipating swings in demand, and personalizing their services by utilizing these technologies.
What to Look Forward for Q1 Real Estate Industry in the Philippines
The second half of 2023 saw an increase in the purchase of residential and commercial real estate by both domestic and foreign buyers, and this trend is predicted to continue into the first quarter of 2024. Office space vacancies are skyrocketing despite challenges caused by a variety of circumstances, as evidenced by the 43% drop in vacant commercial premises in the first half of 2023 compared to the same time the previous year. Since living conditions in the nation are getting better and domestic real estate investments are growing more appealing, Filipino expatriates and OFWs are anticipated to have a major impact on the residential sector’s market upturn. It is predicted that as development projects rise and investors begin to favor the Philippine market, the Philippine real estate market will continue to recover and grow.
Looking Ahead: The Philippine Real Estate Industry’s Q1 Outlook and the Benefits of Crown Asia
Anticipation is high for the trends and opportunities that will define the Philippine real estate market as it prepares for the first quarter of the year. In this context, Crown Asia, a major player in the real estate market, is well-positioned to take advantage of a number of variables that are anticipated to spur growth and have a substantial positive impact on the business.
Demand for Homes and Market Recovery
The Philippine real estate market is expected to rebound from the difficulties caused by the pandemic in Q1 2023. It is anticipated that there will be a significant increase in the demand for housing due to a number of variables, including cheap interest rates, flexible payment options, and pent-up demand. Crown Asia is able to capitalize on the growing urban expansion by virtue of its strategic presence in major growth zones, which attracts potential homeowners looking for established and well-connected areas.
Digital Transformation and Methods Focused on the Customer
The real estate industry has not been immune to the digital revolution that is spreading across industries. The first quarter of 2023 is when technology integration and customer-centric strategies become critical. Crown Asia is well-positioned to capitalize on a tech-savvy consumer base that values simplicity, transparency, and improved home-buying experiences. This is due to the company’s ability to adjust to digital platforms and creative customer interaction tactics.
Crown Asia is well-positioned to profit greatly from the anticipated trends in Q12023 thanks to its strong brand image, varied portfolio of high-end residential buildings, strategic placement decisions, and concentration on customer happiness. The company is positioned to fulfill the changing needs of homebuyers in the Philippine real estate sector as a leader due to its capacity to create sustainable living options, utilize technology, capitalize on infrastructural growth, and match with market demands.
