Global Real Estate Trends in comparison to Philippine Trends

The growth of Philippine Property Industry is focused on office, retail, residential, leisure & hotels, and logistics & industrial. In this report, we indicated the key trends in real estate and showed some actual examples.

1. GLOBAL TRENDS
IN COMPARISON
TO THE PH TRENDS
Prepared by Noemi Pamintuan, Dona Syd Ubales, and Carmela Yumul

2. Content
Growing Optimism PH Property in 2022
Top locations to invest in real estate.
Key Trends in Real Estate for 2022.
Comparison of real estate trends between top
locations and the Philippines.

3. Optimism Growth of PH Property
Industry 2022
OFFICE
RETAIL
RESIDENTIAL
LEISURE and HOTELS
LOGISTICS and INDUSTRIAL
Source: https://www.bworldonline.com/special-features/2022/02/28/432598/growing-optimism-for-philippine-property-in-
2022/

4. PH Property Industry
OFFICE
In the office market sees stabilized performance in the office market,
as hinted by figures in the fourth quarter (Q4) of 2021 and beyond.
“For Q4 2021, there was a moderate take-up of 75,713 sq. m. (square
meters) in gross leasing volumes,”
In terms of elections PH Election, the leasing activities may slow down
in Q1 of 2022 as more investors and occupiers postpone their leasing
decisions as they wait and see where policies might change.
According to Mr. Janlo de Los Reyes-head of research and consultancy at JLL Philippines
Source: https://www.bworldonline.com/special-features/2022/02/28/432598/growing-optimism-for-philippine-property-in-2022/

5. PH Property Industry
RETAIL
Positive outlooks are also seen in retail. Store openings have
outpaced closures, with a huge chunk of that coming from IKEA
opening around 65,000 sq.m. of retail space.
The firm also noted that expansions currently drive store
openings, led by food and beverage (26.6%) and home appliances
and furniture (21.5%) categories.
Source: https://www.bworldonline.com/special-features/2022/02/28/432598/growing-optimism-for-philippine-property-in-2022/

6. PH Property Industry
RESIDENTIAL
Mixed performance is predicted for the residential segment
in the industry.
The vacancy rate in residential condominiums is observed to
have significantly eased (from 6.8 % to 5.1%) due to relaxed
restrictions and higher return to office in Q4. Return to the
office has led to an increase in demand from professionals
working in the business hubs.
Source: https://www.bworldonline.com/special-features/2022/02/28/432598/growing-optimism-for-philippine-property-in-2022/

7. PH Property Industry
LEISURE and HOTELS
Heightened hotel occupancy (87.9% in Q4 2021, the firm’s
highest recorded rate during the pandemic) amid the holiday
season due to lower COVID-19 cases, relaxed restrictions, and
pent-up leisure demand.
For facility types, quarantine facilities continue to lead the way
at 92.8%, followed by multi-use hotels (servicing quarantine
and non-quarantine guests) at 85.6%, and leisure hotels at
79.4%.
Source: https://www.bworldonline.com/special-features/2022/02/28/432598/growing-optimism-for-philippine-property-in-2022/

8. PH Property Industry
LOGISTICS and INDUSTRIAL
Driven by sustained demand in e-commerce, logistics, and
manufacturing across the country.
It is the rising demand for cold storage facilities projected to
sustain demand for industrial assets in the next 12 to 36 months,
citing the Board of Investments’ projection that the revenue of
the country’s cold chain industry will reach P20 billion by 2023.
- Colliers International .
Source: https://www.bworldonline.com/special-features/2022/02/28/432598/growing-optimism-for-philippine-property-in-2022/

9. THE ASEAN 6
ECONOMIC UPDATE for Q1 2022
Source:https://www.adb.org/outlook and https://www.oecd.org/
The ASEAN 6 Economic Review for
the First Quarter of 2022
???????????? Philippines: 8.3%
???????????? Malaysia: 5.0%
???????????? Indonesia: 5.0%
???????????? Vietnam: 5.0%
???????????? Singapore: 3.4%
???????????? Thailand: TBD

10. Top 10 Locations
to invest internationally
Berlin, Germany1.
Seoul, South Korea2.
London, UK3.
Singapore4.
Milan, Italy5.
Madrid, Spain6.
New York City, New York7.
Los Angeles, California8.
Dubai, United Arab Emirates9.
Sydney, Australia10.
Source: https://www.countrylife.co.uk/promoted/10-top-locations-to-invest-in-international-property-in-2022-239048

11. Key Trends to
Desire for Bigger Space
Repurposing of uses
Digital Transformation
Rapid growth of E-commerce Logistics
People move from cities to suburbs
Decline of Rental Property Market
Mortgage rates drop
Real Estate
source: https://explodingtopics.com/blog/real-estate-trends

12. Key Trends to Real Estate
Desire for Bigger Space
01
The size of a home is more important if
You plan to start or grow a family
You already have a large family
You need more space for house guests
You’re downsizing
Size Location
or

13. 01|Desire for Bigger Space
Floor area in sqm
0.00 50.00 100.00 150.00 200.00 250.00
Germany
South Korea
United Kingdom
Singapore
Italy
USA
Spain
UAE
Australia
Philippines
Average Home Size by Country
110 sqm
140 sqm
76.74 sqm
85 sqm
82.78 sqm
223.62 sqm
103.60 sqm
237.20 sqm
132 sqm
source: https://homescopes.com/average-home-size/
97 sqm

14. Reuse of properties
Re-purposing a vacant or underutilized building and
converting it for another use
Investors are eyeing office buildings and old hotels
as ripe for re-development
Examples:
Vacant Malls transformed for Medical use or School
Hotel rooms and dorms converted into quarantine
facilities during COVID season
Key Trends to Real Estate
Repurposing of uses
02

15. Examples in the Philippines:
Ateneo de Manila University
converted its classrooms into
isolation facilities during the
COVID-19 pandemic.
Key Trends to Real Estate
Repurposing of uses
02

16. Examples in the Philippines:
Diplomat Hotel which
was originally built as a
retreat house that would
serve as vacation house
for the Dominican order.
It was remodeled as a
hotel but later ceased
operations and became
abandoned.
Key Trends to Real Estate
Repurposing of uses
02

17. The old Summer Place hotel in
Baguio City converted into a
residential condominium building.
Key Trends to Real Estate
Repurposing of uses
02

18. Key Trends to Real Estate
Repurposing of uses
02
Why investors take advantage?
Value of the property is cheaper.1.
Sustainable because there is less construction
required to convert a building than to create.
2.
Adaptive reuse allows historic character of a
neighborhood to be maintained.
3.

19. Key Trends to Real Estate
Digital transformation
03
Companies were able to
present their projects to
their clients through:
Virtual tours (3D Tours)
Drone Videos
Virtual Staging
Zoom presentations
Marketing Platforms:
Facebook Marketplace
Company's Website
Zillow
Youtube
Tiktok
Instagram

20. Key Trends to Real Estate
Digital transformation
03
Marketing Platforms from other countries and in the Philippines:
Zillow (USA)
PropertyGuru (Singapore)
Lamudi (Philippines)

21. Key Trends to Real Estate
Digital transformation
03
Virtual Tour of a for sale House in North Atlanta

22. Key Trends to Real Estate
Digital transformation
03
Virtual Tour of
SMDC's Projects

23. Key Trends to Real Estate
Digital transformation
03
Third-Party Buyers or "iBuying"
Private companies buy properties from sellers then
resell it at a higher price.
What is an iBuyer?
Instant buyers or iBuyers are real estate companies
like Zillow, Opendoor, and Redfin that use cash to
instantly buy homes from private sellers, then
attempt to resell them for a profit.

24. Key Trends to Real Estate
Digital transformation
03
iBuyer Companies
source: https://ibuyer.com/top-ibuyers.html

25. Key Trends to Real Estate
Digital transformation
03
Using a Virtual Agent
Real Estate companies aim to reduce traditional
agent commissions by handling things online or
use of virtual agent.
Provides partial services that are comparable to
working with an agent.

26. Key Trends to Real Estate
Digital transformation
03
Example of a Virtual Agent

27. Key Trends to Real Estate
Digital transformation
03
Mobile or Online Closing
Digital technology also makes it easier to handle buying
and selling documents virtually.
Many home transactions now use electronic signature apps
and remote online notarization to streamline the process.
Remote Online Notarization
Process of having a state-licensed notary public notarize a
document remotely through the use of electronic signature,
identity verification, audio-visual and electronic notarial
journal and record keeping technologies.
source: https://www.docusign.com/blog/remote-online-notarization-guide

28. Key Trends to Real Estate
Rapid growth of E-commerce Logistics
04
E-commerce Logistics
the process an e-commerce brand uses to get an
order out the door and into the hands of the
customers
Examples of e-commerce companies:
Watsons App, Shein, Zalora, BeautyMNL
Examples of logistics companies:
LBC Express, JRS Express, Ninjavan, Lalamove, J&T
Express, 2GO Integrated, Shopee Express

29. Key Trends to Real Estate
Rapid growth of E-commerce Logistics
04
E-commerce Warehouse
Need additional space to keep inventory in stock
when sales are growing.
Ensures that right levels of inventory are
maintained.
Need to consider warehouse location because of the
transport of products from warehouse to buyers.
Example:
Watsons Warehouse LBC Branch Drop-off

30. Key Trends to Real Estate
People move from cities to suburbs
05
Reasons why people move-out:
Moving out of necessity for those who can't afford.1.
Cost of living in the city is expensive.
Rental prices and Houses are cheaper in the
suburbs.
Lower Taxes
Relocation by choice.2.
Prefer to live in a peaceful location.
Retirement home.
Work from home trend

31. Key Trends to Real Estate
People move from cities to suburbs
05
Will this trend last?
As long as people are allowed to work remotely,
they’ll want to live in suburb areas rather than the
city due to more spacious properties and lower
prices.
What does this mean to buyers and sellers?
Buyers — Competition in finding their dream homes
Sellers— Need to highlight all open spaces to catch the
eye of buyers
Source: https://www.lemonbrew.com/move-to-suburbs-covid-response-or-long-term-trend/

32. Key Trends to Real Estate
Decline of Rental property market
06
Due to shift of people from cities to suburbs, rental
market for both residential and commercial
properties was on decline.
People who can afford rent will instead look to buy
a house (Rent-to-own concept).
People who cannot afford rent will look for
alternatives to save money.

33. Key Trends to Real Estate
Mortgage rate drops
07
What Lower Rates Mean for Buyers:
Can help with affordability
Lower repayments or monthly amortizations
Buyers could potentially be approved with higher property
prices.
Competition from other buyers
What Lower Rates Mean for Sellers:
Convince their buyers to buy their homes sooner than later
Investors will take advantage to increase their portfolio
Increase in first time buyers
Competition from other sellers
sources:
https://www.ramseysolutions.com/real-estate/real-estate-trends
https://firstthingsfirst.net.au/what-low-interest-rates-mean-for-first-home-buyers/

34. Additional Trends in the Philippines
Greater Philippine Real-Estate Investments from OFWs
BPO Firms and POGOs Boosting Philippine Real-Estate
Growth
Potential Increase in Millennial Buyers

35. Growth in overseas Filipino workers
(OFW) remittances is likely to
contribute greatly to the country’s
demand for housing units.
Over 80% of the overseas Filipino
workers (OFWs) in UAE are
considering to buy a property in
the Philippines (according to
survey of New Perspective Media
Group).
Greater Philippine Real-Estate Investments from OFWs

36. Why OFWs invest in Real estate?
Having the own family home1.
Earn Passive income2.
Value appreciation 3.
Flexible payment options 4.
Greater Philippine Real-Estate Investments from OFWs

37. BPO or Business Process Outsourcing
Increase in demand for office space by 38% for year 2021.
Increase in rental income because of BPO employees.
Created new batch of condominium buyers and new
projects near BPO offices
Increase in BPO offices outside Metro Manila.
-Clark Special Economic Zone
- Cebu Business Park
- Iloilo Business Park
BPO s and POGOs Boosting Philippines Real Estate Growth

38. POGO or Philippine Offshore Gaming Operators
Increase in demand for commercial or office space for
online gaming businesses.
Increase in rental income because of Chinese workers
providing IT Support and translation.
Increase in prices of residential sector both midrange
and luxury condominiums.
Developers rushed to supply commercial real estate
spaces because of the minimum required space of
10,000 sqm.
-Paranaque, BGC, and Makati City
BPOs and POGOs Boosting Philippines Real Estate Growth

39. Younger generation is the
dominant segment of the
earning workforce.
Millennials turning 30 years
old on their way to owning a
home if haven't secured one
yet (First time buyers)
Millennials are getting out off
the renting phase.
Increase in Millennial Buyers

40. Thank you
sources:
https://www.ramseysolutions.com/real-estate/real-estate-trends
https://www.hoppler.com.ph/magazine/real-estate-broker-tips/what-you-need-to-know-about-pogos-and-its-effect-on-real-estate
https://www.rappler.com/business/229050-more-overseas-filipino-workers-upbeat-investing-properties-philippines/
https://www.camella.com.ph/philippine-real-estate-outlook-2022-7-trends-to-watch/
https://ohmyhome.com/en-ph/blog/bpo-sector-set-to-boost-property-market-in-2022/
https://business.inquirer.net/330120/pandemic-triggers-home-buying-appetite-of-millennials