ON GENERAL PROPERTY
According to UBX President and Chief Executive Officer John Januszczak, the three main challenges of the real estate industry are the illiquidity of assets, cost of purchasing property, and ratio of income equality. In the Philippines, property is an affordable investment but only for a small fraction of the population.
Real estate assets continue to be illiquid despite having real estate investment trusts (REITs) which only represent a small part of the capital markets, he noted. While REITs help address the nature of properties as an asset, he proposed to convert the rights of an asset into a token on a blockchain.
“Opening up this market would require regulatory support for tokenized asset exchanges or changing the titles themselves to reside on the blockchain as smart contracts,” Mr. Januszczak added. This idea behind tokenized real estate is still in its infancy and can be considered hypothetical.
ON INFRASTRUCTURE
Only Php 1M was included in the National Expenditure Program (NEP) out of the proposed Php 19.8 B of the Department of Transportation (DOTr)’s budget for Road Transport. DOTr Secretary Art Tugade appealed in the Senate Committee on Finance Hearing for the budget to be increased, given that Php 1M will not suffice for the road sector.
Out of the Php 19.8 B proposed budget, Php 13.2B was allotted for locally funded projects and the remaining for foreign-assisted projects. The allocation for the locally funded projects are as follows:
Furthermore, the allocation for foreign-assisted projects are as follows:
While the road sector should be allotted with more budget, more rail projects are being pushed to catch up with neighboring countries in terms of railway infrastructure. Based on the 2019 World Bank survey on railway infrastructures, the Philippines ranked 119th out of 119 countries.
There is a need to increase public mass transportation capacity to keep up with the dense population. And the railroad system has the largest capacity for it.
ON OFFICE
According to JLL Philippines Head of Research and Consultancy Janlo de Los Reyes, the recovery in office space demand is projected in late 2022 due to the uncertainty of the ongoing pandemic. It is anticipated that employers will likely keep their remote work setup until enough Filipinos are fully vaccinated.
He also noted that the office sector’s recovery could begin early next year and will further improve in the latter half, depending on the market developments in the remaining months of 2021.
Return-to-office timelines are expected to be influenced by the “vaccine development and rollout, government policies, new processes and protocols, technology, and new levels of risk acceptance or tolerance by companies and employees.”
The Lobien Realty Group said that companies will continue to use hybrid work measures until the country achieves herd immunity. However, Cushman & Wakefield’s Mr. Cordero anticipated that this kind of work arrangement will continue to be the norm even post-pandemic.
ON RESIDENTIAL
Demand for large residential spaces is driven by staff housing as employees return to workspaces. These residential properties are seen to be close to mass transportation hubs, industrial plants, and export processing zones, especially for the Luzon area.
The demand for affordable rentals increased as parts of the workforce return to the office. Preferred rent spaces are those located near bus stops and train stations or close to business districts like Ortigas, Makati, and Bonifacio Global Center.
ON TOURISM
Air Asia Philippines expects to have its domestic flight frequencies recover fully by the second quarter of 2022 according to CEO Ricky Isla. Although, its international frequencies would not be back until the latter of 2023.
The airline is currently operating at 10-15% of its pre-covid capacity with a load factor of 78%. They plan to increase flight frequencies by December in Cebu, Boracay, and Tagbilaran in hopes of achieving 20% operating capacity and 80% load factor. At present, they are flying to 14 destinations and will continue to open more domestic routes by the first quarter of 2022.
By December, they will also open international flights catering to OFWs returning home for the holidays to Taiwan, Hongkong, and Singapore.
Sources:
Abadilla, E. (2021, October 01). Road transport gets P1-M budget. Retrieved October 06, 2021, from https://mb.com.ph/2021/10/01/road-transport-gets-p1-m-budget/
Abadilla, E. (2021, September 29). Air Asia expects domestic Pax Recovery Q1 2022. Retrieved October 06, 2021, from https://mb.com.ph/2021/09/29/air-asia-expects-domestic-pax-recovery-q1-2022/
Ibañez, J. (2021, September 06). Delta upends office recovery. Retrieved October 06, 2021, from https://www.bworldonline.com/delta-upends-office-recovery/
Ibañez, J. (2021, September 13). Regulatory support sought to boost real estate liquidity. Retrieved October 06, 2021, from https://www.bworldonline.com/regulatory-support-sought-to-boost-real-estate-liquidity/
Ibañez, J. (2021, September 21). Demand for staff housing helps buoy residential market ... Retrieved October 6, 2021, from https://www.bworldonline.com/demand-for-staff-housing-helps-buoy-residential-market/