16 June 2020 – MBC hosted a digital forum with Dr. Victor Calanog, Head of Commercial Real Estate Economics of Moody’s Analytics (New York) to discuss how the US economy and real estate has been affected by and is recovering from post-COVID. He and participants discussed parallels and effects with Philippine property.
Calanog said only 3 percent of Manhattan office space is currently occupied. Safety concerns and the shift to online platforms may soften demand for office, retail, and industrial space in the US. Meanwhile, multifamily properties like apartment buildings will experience the least decline.
In the Philippines, digital transformation may have little impact on the property market. Office spaces are expected to recover quickly as the country’s ICT infrastructure cannot sustain remote work for the majority of the population. Meanwhile, some BPOs are expanding due to new demand and/or need more space per worker due to social distancing. The lack of digital access, along with “Filipino mall culture”, may also cause the demand for Philippine retail spaces to recover faster than some expect.
There have been no significant terminations or declines in prices, according to Bobby Dy, CEO of Ayala Land Inc., who opened the event. He expects prices will resume the mid-teens annual appreciation that they have experienced through various crises over many decades.