Ortigas a key business hub beyond COVID-19
Pandemic-induced disruptions have altered the Philippine economy and the property sector.
Despite this, Colliers Philippines expects a recovery in new residential supply in 2021, as developers are already exploring the viability of new project launches in key areas across Metro Manila and are preparing to tap pent up demand.
The government’s vaccination program is offering a glimmer of hope, and economic recovery would boost local investor and end-user demand.
In our view, developers should further test demand in the luxury market and become more innovative with promotions and incentives. At Colliers Philippines, we believe that attractive schemes contributed to pre-selling take up since the start of the pandemic. The recovery of the residential market will likewise hinge on office leasing rebound.
In our view, Ortigas Center will remain a major office hub in the capital region. The business district will continue to attract high-profile tenants and this should contribute to a stronger take up of condominium units in the business district beyond 2021.
REBIRTH OF ORTIGAS
According to a Colliers Philippines report entitled “Visions of the future: The Rebirth of Ortigas” written by my colleagues Alaine Yap and Kevin Jara from our Tenant Representation group, “geographical connectivity, community integration, accessibility through infrastructure, and attractive business costs are amplifying Ortigas Center as an ideal commercial location.”
The report further highlighted that as the geographical midpoint of Metro Manila, Ortigas Center attracts labor across the entire metro, particularly from the east and west. It added that with the completion of two bridges and an upcoming subway project, Ortigas will remain a major gateway and a transit hub.
COST EFFECTIVE LOCATION
Colliers believes that Ortigas Center remains a cost effective business location that has the full features of a central business district (CBD).
The report noted that “Ortigas remains well-positioned for companies looking to take advantage of the full features of a central business district at a lower office rental cost since rents in the area offer a significant discount to other business districts. For some companies, this may be a sensible business strategy to achieve cost-savings and occupy space in quality buildings. While Ortigas is already fully conducive right now for business, the planned transportation infrastructure in the pipeline will further amplify its attractiveness as a commercial location.”
Note that the government’s massive infrastructure program will be a major plank of our economic recovery, with property among the major beneficiaries.
DEMAND FOR LUXURY PROJECTS TO THRIVE
Colliers Philippines believes that projects in the luxury segment are the least-affected during an economic slowdown.
Joint venture (JV) projects between local and foreign firms are currently among the most expensive developments in the market, offering innovative facilities and amenities. Despite the higher price, the average take-up in these projects reached 85 percent as of end 2020.
Colliers believes that Philippine developers should seize the opportunities in the market by further exploring partnerships with foreign firms.
Given the potential demand, we expect more luxury projects to be launched in the market.
In our view, Ortigas Center will remain a hub for upscale and luxury condominium projects. Given the improving connectivity due to upcoming and existing infrastructure projects, the government-projected economic growth, and a sustained demand from outsourcing and traditional firms, Ortigas will remain a major business hub in Metro Manila and this should support the demand for more condominium developments well beyond the pandemic.
Hence, investors and end-users should look forward to more interesting developments in this area.
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