Real estate repurposing to keep industry afloat through pandemic
By Denise A. Valdez, Senior Reporter
THE repurposing of real estate assets is seen as key to the survival of the industry as the coronavirus pandemic continues to pull down the Philippine economy.
In a recent prospective report, property consultancy firm Colliers International Philippines said landlords and property owners have to learn to adjust their assets to adapt with changing consumer behaviors.
This would apply differently per real estate category, but generally all would have to consider the evolving consumer needs and financial capabilities.
For the office segment, Colliers said developers must consider building office spaces in non-core locations, as containing the coronavirus outbreak entails limiting mobility and human interaction.
“This is important especially for companies planning to implement a hub-and-spoke model wherein occupiers reduce the reliance of a single headquarters location for a more dispersed occupancy strategy,” the report said.
Developers that have mall leasing in their portfolio might also find it beneficial to convert vacant mall spaces into flexible workspaces, as mall foot traffic remains low due to government restrictions.
For the hotel segment, Colliers anticipates that tourist arrivals would remain dampened throughout the year due to lockdown restrictions. This means hotel operators are likely to hit only 30% occupancy this year.
To adjust, developers are advised to convert leasing spaces into co-living facilities and flexible workspaces. They are also told to highlight efforts in complying with health and safety protocols to temper consumer worries.
The industrial segment is seen as a bright spot by Colliers, as the rise in demand for food, medical and household products may offset the slowdown in demand from electronics manufacturers.
Warehousing companies are advised to tap digital technology to modernize their facilities to suit the needs of the growing e-commerce industry. Mall spaces that have been vacated by inoperable tenants are also seen as viable spaces for warehousing.
Lastly, the residential sector would have to adjust to the changing priorities of property hunters. Colliers said it expects vacancy rates to reach mid-teens at the end of the year as many have grown more cautious of spending.
Developers are told to offer attractive payment terms to continue attracting buyers and tenants, despite the effects of the pandemic.
“The Philippine economy continues to reel from the impact of the pandemic and lockdowns, officially entering into a recession. Colliers believes that conversion and repurposing of assets are crucial amid the pandemic and global economic downturn,” it said.