Policies, tech adaptation, sustainability to define 2022 PH real estate

Several key themes are expected to shape the Philippine real estate market this year, according to JLL Philippines.

One of these is the political environment in 2022. While this is expected to affect activities in the real estate market, it is also seen to provide legs for future growth. Another would be the Philippine Economic Zone Authority (Peza) moratorium, which continues to have an impact in office leasing activities.

JLL Philippines said that in the third quarter of last year, it saw pick up in terms inquiries by IT and business process management (IT-BPM) companies as they are waiting on the Peza moratorium decision—whether it would be lifted or extended to the following year.

The Retail Trade Localization Act is also projected to impact real estate activity.

“In the long term, we expect growth in retailer demand, with the Philippines becoming a hotbed for retail destination. There are requirements removed in the revision, which will hopefully attract more capital for perspective retailers,” said Janlo de los Reyes, JLL Philippines head of research and consultancy.

JLL also forecasts the Regional Comprehensive Economic Partnership (RCEP) and the amendments to the Public Services Act to provide structural changes in the market, as these are expected to attract foreign investments.

Also expected to have an impact on real estate is the rising prominence of technology in the built-up environment.

“Sustainability and safety and wellness are also accelerating technology adoption across occupiers,” said De los Reyes. JLL cited contactless systems, access cards, automated censors and aircon filters as examples of adopted PropTech.

Environmental, Social and Governance (ESG) investments are likewise essential to success.

Nix Garchitorena, JLL Philippines energy and sustainability services manager, emphasized the importance of a continued push for actionable steps in achieving sustainability goals. According to Garchitorena, out of the top 50+ clients globally, 96 percent have set ambitious, publicly-stated sustainability goals, and 88 percent of them have set those goals but will expire by 2025. Only 19 percent have a clear, real estate-specific sustainability action plan, and the goal in 2022 is to narrow the gap between publicly-stated sustainability goals and specific action plans.

Demand for green certifications is also on the rise, with both new and old offices making efforts to meet this demand.

Calum Swinnerton, JLL Philippines head of project development and services, noted asset enhancement as a solution for occupiers to meet the demand for updated buildings.

“Over 50 percent of buildings in major cities are over 20 years old and most have not been upgraded to meet post-COVID-19 requirements. As vacancy rates increase and rental rates decline, a ‘do nothing’ approach will not preserve or enhance value,” Swinnerton said, further citing health and wellness, human experience, sustainability, and technology as areas whose enhancement focuses changed since the pandemic began.