MANILA - The Philippine property sector will show signs of recovery only in 2022, with record-high vacancy rates still expected this year amid the COVID-19 pandemic.

That’s according to real estate company Colliers International Philippines, which sees the local residential property segment suffering another record-high vacancy rate in 2021 at 16.9 percent from 15.6 percent in the fourth quarter of 2020.

Aside from the economic slowdown caused by the pandemic, Colliers attributed the high vacancies to new real estate units that entered the market in recent years especially in the Manila Bay and Fort Bonifacio business districts.

As such, average rents in the secondary residential markets are seen to be stagnant this year, only rising by half a percent following a 7.8 percent slump in 2020.

The office leasing environment also seeing high vacancy rates in 2021 at 12.5 percent, the worst since 2003, or the aftermath of the Asian Financial Crisis.

But Colliers International Associate director Joey Bondoc said there are still bright spots in the local market.

“There’s still some optimism in the residential market (jump-cut) industrial and logistics sector is one property segment of relative stability despite the economic uncertainty that we’re seeing in the market right now,” Bondoc explained.

Case in point, Colliers is seeing the spike in investments from the manufacturing and logistics sector to boost demand for the industrial property segment to 80 hectares this year from negative 8 hectares as of the second half of 2020.

The international firm attributed this to the high demand for essential manufactured goods, as well as the fast-growing e-commerce sector which has been boosted by lockdown and physical distancing measures.

As for the retail and hotel property segments, the organization believes they will be among the last to recover from the pandemic with the travel sector only seen recovering in 2023 or even 2024.

“If you’re a hotel in Metro Manila right now, it’s very tough. Good example is Shangri-la. It’s a very big hotel, you have a big manpower, and it’s hard to run it right now, so they have to take that decision," said Richard Raymundo, Colliers managing director.

Colliers senior director Calvin Javiniar said other hotel investors may now be thinking of exiting the ailing industry.

“Some of the owners are also thinking of their exit strategies and a lot of them would be looking to find creative ways to exit not necessarily to dispose outright,” Javiniar said.

“But right now we haven’t really seen them acting seriously on prospects of this position.”

For now, Colliers is still seeing a strong demand for hotels outside Metro Manila, with accommodations in Tagaytay, Batangas, Bulacan, Boracay, and El Nido in Palawan seeing healthy uptake.

David Leechiu, the founder of Leechiu Property Consultants, earlier said property prices in the Philippines have gone up, or at least held their ground since the coronavirus hit, showing that real estate is still "the best asset" to hold as it withstood the pandemic.

He added that he is optimistic about the property sector, noting that property prices in BGC appreciated by 12 percent in the past 18 months, in contrast to the 50 to 60 percent slump of the stock market and the near 10-percent contraction of the economy.

• Real estate still 'best asset' to hold amid pandemic: property specialist

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