Village Connect
Leading real estate brokerage and consultancy firm, KMC Savills, recently presented an overview of the Philippine real estate market for 2024. The event, led by KMC Savills’ Research and Consultancy team, as well as their CEO Joe Curran and COO Cha Carbonell, provided valuable insights into the current state and future outlook of the country’s property market.
CEO Joe Curran began by reflecting on the previous year before delving into the Metro Manila Office market sector. He noted that upcoming office completions are expected to stimulate leasing activities in 2024. While an increase in vacancy rates is anticipated due to multiple office building completions this year, demand is projected to remain strong.
Bonifacio Global City continues to be a highly sought-after location for prime buildings, leading all submarkets with over 2 million sq m of office stock and an incoming supply of approximately 182,000 sq m – the highest among all submarkets in Metro Manila last year.
Significant transactions occurred in Q4 2023, with around 110,000 sq m of office space leased. New buildings in Makati achieved high occupancy rates despite intense competition within the office landscape.
In terms of lease rates post-pandemic, Metro Manila’s average stands at ₱858 per sq m – a decrease of 6.7% from pre-pandemic levels. Notably, Iloilo experienced a rental rate increase during the pandemic due to sustained demand from the IT-BPM (Information Technology-Business Process Management) sector. This sector’s expansion beyond Metro Manila is driven by larger talent pools and relatively lower wages.
Moving on to the Industrial sector, COO Cha Carbonell highlighted manufacturing and logistics as key drivers behind industrial hubs’ growth. Manufacturing accounts for approximately 41% of current tenant demand.
Laguna remains a primary location for more than half of warehouse stock; however, elevated vacancies may exert downward pressure on warehouse rents. It is worth mentioning that Bulacan saw a significant decrease in rental rates by 42%, followed by Pampanga with a decline of 21%.
In terms of residential properties, Joshua De Las Alas from KMC Savills Research and Consultancy discussed how middle-market consumers are increasingly relying on PAGIBIG (Pag-IBIG Fund) for financing their dream homes outside Metro Manila.
The need to live closer to workplaces has diminished due to various factors such as rising interest rates; this has resulted
