MANILA: The Philippine property sector is likely to regain lost ground in 2022 as the country shifts from Covid-19 pandemic to “endemic” management, but it will take more time to return to its pre-pandemic vibrancy, property consulting firm Colliers says.

       “We’re hoping for a V-shaped recovery, but I think it will be a slow, gradual recovery,” Joey Roi Bondoc, Colliers associate director, said in a property briefing.

       In the office property segment, Colliers senior director Dom Fredrick Andaya reported that average office lease rates in Metro Manila had dropped by 12.4% in 2021, but this was slower than the 17% decline in 2020.

       Colliers sees a slow office market recovery starting in the second half of 2022, supported by sustained office absorption. For the whole of 2021, office property transactions grew by 18% to reach 422,000 square meters.

       Still, office vacancy reached 15.7% in 2021, higher than the 9.1% posted in 2020. This year, Andaya said the vacancy rate would rise further to 18.9% due to muted preleasing activities and the completion of new office supply. But this was likely to peak at around the 19% level and start to plateau in 2023.

       Andaya said vacancy rates may remain at double-digit levels until 2025, unless new demand from business process outsourcing firms, the Philippine offshore gaming operators and other occupants would grow faster than expected.

       And with new office supply coming this year, rental rates are seen to decline by another 10% even if the volume of transactions had been rising every quarter.

       On the residential segment, Colliers reported that rental rates across the secondary market declined in the fourth quarter of 2021 as demand from expatriates and local professionals remained subdued. However, a slight rental rebound is expected by the second half of 2022 as more businesses summon their employees back to their offices.

       Residential rental rate in the metropolis is seen to improve by 1.7% this year and further by 2.3% through 2026.

       “The bright spot here is we’re seeing a good take-up in residential house and lots in the horizontal segment. That’s why if you look at the developers, there was a shift in their launches,” said Richard Raymundo, MD at Colliers. — The Philippine Daily Inquirer/ANN