Condo rental rates in CBDs still lower than pre-pandemic level

IF you’re looking for a condominium unit to rent, now may be a good time to consider those in key central business districts (CBDs) in Metro Manila.

In an April 28 report, Colliers Philippines said rental rates for residential condominium units in the main CBDs have dropped by an average of 15% in the first quarter of 2022 versus the same period in 2020.

“Colliers saw a significant decline in rents for studio and 1-bedroom units in major CBDs including Makati CBD, Fort Bonifacio and Ortigas Center compared to their pre-pandemic rates,” it said.

“Colliers recommends that tenants take advantage of rental corrections in these prime locations.”

According to Colliers, the average rental rate per square meter (sq.m.) for a studio and one-bedroom unit in Makati CBD stood at P930 in the first quarter of 2022, 15% lower than the P1,100 in the first quarter of 2020.

In Fort Bonifacio, Taguig, the average rental rate for a studio or one-bedroom condominium unit dropped 14% to P870 per sq.m., while in Ortigas Center, the rate slipped 15% to P910 per sq.m.

“In our view, the return of more employees to their respective offices should help stoke residential leasing demand for these key locations,” Colliers said.

Many companies have asked employees to return to the office amid the decline in coronavirus infections and continued easing of pandemic restrictions in Metro Manila.

Colliers said developers with ready-for-occupancy units within these CBDs should consider offering “attractive” leasing terms to tenants in order to boost occupancy.

Joey Roi Bondoc, associate director for research at Colliers, noted that property market optimism has improved as the economy gradually reopened.

“We now see more businesses encouraging their employees to return on site. This, coupled with the return of more foreign employees should have a positive impact on residential leasing. Hence, we are projecting a gradual recovery in rents and prices which should extend beyond 2022… Hence, we project a recovery which should start by the second half of 2022,” he said.

UPSCALE CONDOMINIUMS
Meanwhile, Lamudi Philippines said its latest data showed strong demand for condominium rentals in the main CBDs — Makati, Pasig and Taguig, with double-digit growth in leads in the first quarter from the fourth quarter of 2021.

In a statement, Lamudi said mid-cost condominium units for rent priced between P15,000 to P60,000 in these three CBDs had the most leads, but also noted an uptick in demand for upscale rentals.

“In Makati, leads for condo rentals priced between P60,000 to P100,000 increased by almost 90% quarter on quarter, the largest spike out of all other price segments in 1Q 2022. This may be attributed to increasing interest in larger personal space following the pandemic, as the majority of leads for listings under this price segment went to 2-bedroom followed by 3-bedroom units,” it said.

Lamudi data also showed robust demand for units for rent between P15,000 to P30,000, with a 46% spike in leads quarter on quarter.

Leads for condominium units in Taguig surged 60% quarter on quarter, mainly for units in the P30,000 to P60,000 rent range.

“However, potential Taguig condo renters showed growing demand for upscale rentals as leads for the P200,000 to P500,000 price band doubled from 4Q 2021 to 1Q 2022, possibly driven by interest from returning expats and investors following amendments to the Retail Trade Liberalization Act,” Lamudi said. — Cathy Rose A. Garcia