Part One
A LITTLE above a decade ago when I started working in communications and marketing for the real-estate industry, Bobby Dy, then incoming head of Community Innovations, once said to me, “Real estate is a public trust.”
This advice defined my career.
People entrust you with their hard-earned money, whether for a residence, investment or even a few hours in your mall. Work in this industry carries immense responsibility to the public good, beyond just to your shareholders.
There’s a palpable shift in the times as evidenced by the changing of the guards. The leadership in the industry is young, dynamic and focused on things that matter the most. The themes dominating the discourse have shifted to technology, resilience, climate change, shared living and working, and things that truly matter to the collective good.
Presenting a recap of the year that was and prospects for 2019
Eric Manuel, ARCH Capital, Philippines, Asian Institute of Management
What was the defining trend in real estate last year?
The combination of technological and demographic trends has led to developers and occupiers implementing flexibility in their overall real-estate strategies. The coworking trend is just the beginning of something much more disruptive.
What do you see happening for next year? 2019?
Companies will have to master agility, the ability to think, understand and move quickly. Business models must change, with technology at the center, to adapt to new demands and unpredictable macroeconomic forces. The agile companies will win top talent, market share and investor funds.
2018 saw the continuing rise of mixed-use developments in various parts of the country—truly a reflection of the growing urban migration.
“For 2019, I’m expecting more innovative mixed-use developments to launch in 2019. Also, expect to see more attention to landscape in the newer projects.”
Chris Narciso, ArthaLand and SHDA member board of governors and past national president
Record breaking by the end of 2018, the Philippine real-estate market would have broken many records. Largest amount of new supply, largest amount of take up, most number of emerging business districts and new townships, highest capital prices for land, condo units, etc. The record that we’re happiest about, though, is the highest ever number of registered and certified green buildings under credible green building rating tools like Berde (our national voluntary green building rating tool, BerdeOnLine.org) The market is embracing sustainability more and more with every passing year.
2019 is shaping up to be a year of volatility and uncertainty. However, we still forecast 2019 to be a banner year in terms of green building and sustainability given the level of commitment from many of the developers in their ongoing and planned projects. Also, we have successfully established this year that basic green building certification (under Berde) is achievable at zero construction cost premium (excluding actual certification cost), which will be a huge growth driver in greening more of our real-estate industry.
Raymond Rufino, chairman, Philippine Green Building Council
2018 has merely been an appetizer as we are eyeing for year 2019! In 2018, we got a greater taste for coworking and liked the flavor. We enjoyed the continued foreign direct investments from predominantly China. Business-process outsourcing growth is no longer progressive. The government’s “Build, Build, Build” boosted prices, but also appreciated the value of foreign currencies, thus making foreign remittances from overseas Filipino workers and foreign investors even more enticing for senders and recipients alike.
The millennials, start-ups and SMEs are largely behind the growth in coworking like a new grassroot movement. Overall, it’s likewise the multinationals that continue to seek flexible rather than conventional workspace. In 2019, we’ll not see any new office buildings without the element of flexible working. The speed of change is simply too rapid solely to rely on conventional office space. Besides, the employees are more productive with flexible working and easier to attract and retain.
The supply of new commercial office space has been record-high in 2018 with over 1.2 million square meters of office space turned over. While this rate is expected to continue in 2019, the question is whether the demand will remain as strong as currently is the case. 2019 has greater uncertainties than we faced when entering 2018. Should the BPO sector diminish, or the global economy slow down, the real-estate sector may go from boom to gloom.
Nevertheless, 2018 has been merely an appetizer, and 2019 is when all the trends will take a giant grip in the market. Moving from commercial square meters as a commodity to work spaces shaped for community building, knowledge sharing and flexibility. How big the overall demand will become is the real question.
Lars Wittig, country manager, Philippines-Vietnam-Cambodia, Regus & SPACES by IWG
2018 saw the growing of partnerships and collaboration to develop land, often while addressing the challenges of urbanization like creative housing solutions and decongestion from Metro Manila.
2019 may see more urgent property integration with infrastructure to capture transit-oriented development value as major connectivity gets within horizon. A need and will to step up regional competitiveness.
Sylvester Wong, vice president, Asia/Buildings & Places-Philippines Asia/SEA, AECOM
“Developers are increasingly planning and designing their buildings to help their tenants achieve their business objectives, especially on talent retention. As a commercial office developer, we have designed green office buildings that can help employees be healthier and more productive, and incorporated retail choices and coworking spaces to enrich their time in the office. We ensure that the office is accessible, close to major infrastructure, as well as located in a community where employees can have a work-life balance.
We believe this trend will continue to the succeeding years as developers cater more to the well-being of their tenants. We also find this as an opportunity for businesses to expand outside the established business districts and closer to upcoming infrastructure projects that can bring about greater connectivity.”