Commercial Real Estate - Philippines
- The Commercial Real Estate market market in the Philippines is predicted to reach a staggering US$0.77tn by the year 2024.
- This projection indicates a promising growth potential for the sector.
- Furthermore, it is anticipated that the market will experience a steady annual growth rate (CAGR 2024-2029) of 0.77%, resulting in a substantial market volume of US$0.80tn by 2029.
- When compared to other countries globally, the United States is expected to generate the highest value in the Real Estate sector, with a projected figure of US$25,280.0bn by 2024.
- This highlights the significant role the United States plays in the global Real Estate market.
- Despite the challenges brought by the pandemic, the commercial real estate market in the Philippines is showing resilience and attracting foreign investors due to its strategic location and growing economy.
The Commercial Real Estate market in Philippines is experiencing significant growth and development. Customer preferences are shifting towards modern and well-designed office spaces, retail centers, and industrial parks. This trend is driven by the increasing demand for high-quality commercial spaces that can accommodate the needs of both local and international businesses.
Customer preferences: In recent years, there has been a growing demand for commercial real estate properties in Philippines that offer modern amenities and well-designed spaces. Businesses are increasingly looking for office spaces that can provide a comfortable and productive working environment for their employees. This includes features such as open floor plans, natural lighting, and access to amenities such as gyms and cafes. Retail centers are also in high demand, with customers seeking convenient and well-designed spaces that offer a wide range of shopping and dining options. Industrial parks are also experiencing growth, as businesses look for well-equipped and strategically located spaces for manufacturing and logistics operations.
Trends in the market: One of the key trends in the commercial real estate market in Philippines is the development of mixed-use properties. These properties combine different types of commercial spaces, such as offices, retail centers, and residential units, in a single development. This trend is driven by the desire to create vibrant and integrated communities where people can live, work, and play. Mixed-use properties offer convenience and accessibility, as well as a diverse range of amenities and services. They also provide opportunities for businesses to tap into a captive market of residents and workers. Another trend in the market is the increasing focus on sustainable and green buildings. Businesses and customers are becoming more conscious of the environmental impact of their operations and are looking for commercial spaces that are energy-efficient and environmentally friendly. Developers are responding to this demand by incorporating sustainable design features, such as solar panels, rainwater harvesting systems, and green spaces, into their projects. These green buildings not only help to reduce operating costs but also attract environmentally-conscious businesses and customers.
Local special circumstances: The commercial real estate market in Philippines is also influenced by local special circumstances. One of these is the rapid urbanization and population growth in major cities such as Manila and Cebu. As more people move to these urban centers, the demand for commercial spaces, particularly office spaces and retail centers, is increasing. Developers are capitalizing on this demand by building new commercial properties and revitalizing existing ones. Another special circumstance is the growing presence of the business process outsourcing (BPO) industry in Philippines. BPO companies require large office spaces to accommodate their operations, and this has led to a surge in demand for commercial real estate properties. Many developers are specifically targeting the BPO sector by building office buildings that are designed to meet the unique needs of BPO companies, such as 24/7 operations and redundant power and internet connections.
Underlying macroeconomic factors: The development of the commercial real estate market in Philippines is supported by several underlying macroeconomic factors. These include the country's strong economic growth, favorable business environment, and government support for infrastructure development. The Philippines has been one of the fastest-growing economies in Southeast Asia, attracting both local and foreign investments. This has created a demand for commercial spaces to accommodate the expanding business activities. The government has also implemented policies and initiatives to attract foreign investments and promote the growth of the commercial real estate sector. These include the creation of economic zones and incentives for developers and investors. The government's focus on infrastructure development, such as the construction of new airports, roads, and railways, is also driving the growth of the commercial real estate market. These infrastructure projects provide opportunities for developers to build commercial properties in strategic locations. In conclusion, the commercial real estate market in Philippines is experiencing growth and development due to shifting customer preferences, trends such as mixed-use properties and sustainable buildings, local special circumstances such as rapid urbanization and the presence of the BPO industry, and underlying macroeconomic factors including strong economic growth and government support for infrastructure development.
Methodology
Data coverage:
Figures are based on value of commercial real estate.
Modeling approach / Market size:
Market sizes are determined by a bottom-up approach. As a basis for evaluating this market, we use national statistical offices. Next, we use relevant key market indicators and data from country-specific associations such as share of industry, manufacturing, and services of the GPD, price level index, GDP. This data helps us to estimate the market size for each country individually.
Forecasts:
In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the market, for example, exponential trend smoothing.
Additional Notes:
The market is updated twice per year in case market dynamics change. The impacts of the Russia-Ukraine war are considered at a country-specific level.
Source: https://www.statista.com/outlook/fmo/real-estate/commercial-real-estate/philippines?fbclid=IwY2xjawFfBi1leHRuA2FlbQIxMQABHQtt-besZ_l6lzl1uvzZ78OMVwzsPHcdIMRwSt02kunZnQbqJ-FHJrfKHg_aem_eEx7jf4KBpW92TIXmxoOsA#:~:text=The%20Commercial%20Real%20Estate%20market,tn%20by%20the%20year%202024
