Strong foot traffic in malls, BPO expansions show signs of PH recovery – property firm

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(FILE PHOTO)

Metro Manila (CNN Philippines, December 15) — The economy appears on track for a strong recovery, marked by a return of customers in retail outlets and pulled up by the booming outsourcing sector, Leechiu Property Consultants said.

In its fourth quarter report, the real estate firm said early signs from the property sector show hints of a "market euphoria".

Its founder David Leechiu said the rollout of big-ticket infrastructure projects, a resilient property market, "fantastic" fiscal positions, and positive global events will give a boost to the real estate scene.

"Despite all the bad news there are still many things that are happening in the Philippines, that will lead us to a quick recovery," he said in a virtual briefing on Tuesday.

READ: PH economy to start bouncing back by 2021 – World Bank

Leading the resurgence is the surge in demand for office space from the business process outsourcing or BPO sector.

Strong takeup of the BPO sector pushed 381,000square meters worth of new office space deals, the consultancy firm reported, with 69% located in Metro Manila. The on-demand hub was Iloilo, beating Cebu and Clark.

The IT-BPM industry accounted for 48% of the new leases, which helped offset the exodus of Philippine offshore gaming operators or POGOs, which Leechiu said has not taken up new commercial leases since March when the sector was part of the general lockdowns.

In sum, 540,000 sqm of office space were vacated this year, the bulk of which were in Metro Manila where the coronavirus outbreak was first detected. Of these, 51% were POGO spaces. This translated to ₱1.4 billion in losses from office rent.

READ: POGOs must pay all taxes from April and earlier before reopening – BIR

Meanwhile, only 16% or 84,000 sqm of the vacated space were from IT-BPM players.

The Metro Manila segment also saw greater action this year, led by condominiums with 42,600 units sold, while the appetite also grew for homes outside the city, as well as in coastal or beach areas.

There were also encouraging signs in the retail sector.

"I'm happy to say that in the last two months, they've gone from 10% to 50% to as much as 75% in pre-COVID traffic. And that is another sign of how well the recovery is happening –– in isolated cases, some restaurants, some fast fashion companies are already at 90% pre-COVID levels," Leechiu said.

The Philippine economy shrunk by 10% from January-September this year, as strict quarantine protocols kept people at home and most business establishments shuttered.

Rules have since been relaxed but consumer confidence remained sluggish.

Meanwhile, Leechiu Property sees the tourism sector fueling real estate growth, especially outside Metro Manila.

READ: Existing age restrictions hold back economic recovery, job creation – DTI chief

Meanwhile, Leechiu Property sees the tourism sector fueling real estate growth, especially outside Metro Manila.