The COVID-19 pandemic has brought dramatic changes to how business transactions are carried out all over the world. In the Philippines, businesses that had to close down for more than two months have now only begun to reopen as communities start to transition to a more relaxed form of quarantine.
For the property sector, the “new normal” has presented as many challenges as new opportunities. Property developers, investors, buyers and sellers alike, at least those who are able to, are encouraged to make the most of these opportunities ushered in by the new market setting.
Property developers who are able to highlight their health and sanitation measures, among other property management procedures, are bound to get the nod from more clients under the new normal.
Except for a few higher risk areas, most cities and provinces in the country that earlier had to impose total lockdowns have already made their transition to General Community Quarantine (GCQ). This includes Metro Manila, the center of the commercial and residential property sector in the country. Essential businesses, including those in manufacturing, retail, and services like Business Process Outsourcing (BPO) companies, have been allowed to operate, but under a less-than-full-capacity set-up and with stricter health and sanitation protocols.
Property research experts, such as the Colliers International Philippines, believe real estate developers should take this opportunity to engage already with potential clients and determine how better to respond to what the new market needs. Developers who can highlight their property management and hygiene and sanitation measures, such as preventive initiatives against viral infection and transmission, would likely attract more clients especially when the market returns to its previous vitality.
Joey Roi Bondoc, Senior Research Manager at Colliers, also wrote in Inquirer that both commercial and residential property developers should take note of these vital changes in the selection criteria of customers moving forward.
For B&P Property, the “new normal” will make more apparent the need for a high quality residential living space where health and security of the family are the top priority. To respond to these needs, B&P Property are upgrading their property management delivery by adopting distinct features, such as:
– All developments are low-density, having only a few units to ensure privacy and proper social distancing.
– Homes are bigger than average to give family members ample space.
– Homes are well-ventilated as each one is fitted with at least one balcony.
– Homes are internet connection-ready for utmost productivity and entertainment.
– Condo and subdivision development gardens and open common areas allow for fresh air and freedom of movement.
– Project or Property Management Teams strictly implement hygiene, sanitation and security protocols.
The “new” market competitiveness will also likely be based on developers’ ability to come up with innovative solutions to problems brought about by the pandemic.
The market also demands property developers to think outside the box when they devise solutions to issues posed by the new normal. For instance, experts believe property developers should explore more creative schemes to address the growing demand for on-site or near-site accommodation arrangements in the BPO sector.
Colliers International Philippines encourages developers of ready-for-occupancy (RFO) units to consider leasing out condominiums as shared units for BPO companies. Bondoc also wrote how co-working spaces and facilities may become more lucrative under the new norm since these arrangements offer more flexible leasing contracts to tenants than traditional offices with long-term leases.
For those working in township projects, site location is believed to remain as a primary concern among potential unit owners, with emphasis on accessibility of the area and inclusion to an integrated community. Clients will be scouting for units where they can enjoy easy access to a nearby supermarket and a clinic, among other facilities. At B&P Property, residential units have been strategically located near essential services and establishments such as churches, hospitals, government offices and schools. There are also well-designed leisure amenities to keep the fun close to home.
The new market will also push conventional developers to adopt new norms as more clients would be looking forward to optimized spaces that promote not only health and wellness, but also sustainability of their prospective homes. For instance, the Empire East Land Holdings foresees a heightened demand for integrated and mixed-use developments for a home as those promote flexibility and convenience for homeowners so they can get their essentials within the property. Their upcoming development, the Empire East Highland City, is a 24-hectare township that dedicates its phases to efficient use of homeowners. The property will have an open park, a 58,000-sqm mall, and a membership club that will offer world-class amenities and sports facilities to support homeowners’ active lifestyles. Aside from these offerings, the whole property shall also be designed sustainably – incorporating renewable energy sources, better-planned infrastructure like installation of bike lanes, environmentally-friendly features like planting more trees, and earth-friendly materials like LED lights and low VOC paints.
SM Development Corporation (SMDC), on the other hand, shared that during this pandemic, their developments’ built-in commercial establishments have been the saving grace for their homeowners, giving them easy access to food, medicine, ATMs, service centers and other essentials. With social distancing and restricted personal movement as part of the new normal, residents do not have to go out of their properties for fun and social activities, or to have a semblance of space. They can safely stay within the SMDC property and enjoy the well-appointed amenities and top-notch facilities they offer.
Adoption of modern technological trends will be the key to keep work disruptions to a minimum amid these uncertain times.
The pandemic has shaped the landscape of office work for good and many are now seeing the advantages of a mix of traditional and alternative working arrangements such as the use of flexible co-working spaces. Stocking up on modern technology, such as on cloud computing strategies, would also help tenants minimize work disruptions especially if employees need to perform their duties remotely. Indeed, the pandemic has made even more important the need for businesses to adopt modern digital trends in their operations, such as options for contactless and cashless orders and payments.
For example, SMDC offers units that are designed to allow ample lighting and natural ventilation, which are conducive to a productive work-from-home (WFH) set-up and economical energy consumption. Their wifi-equipped lobbies with open-air lounges and co-working spaces also provide the perfect setting for a work-from-home environment that strictly adheres to social distancing.
“Real estate selling requires relationship building, rapport & physical interface – all of which are traditional approaches. This pandemic has forced almost every developer to shift their focus and incorporate a digital selling platform. We were lucky enough to have started our digital marketing campaigns earlier than the ECQ lockdown. And since then, we have been receiving positive responses from sellers seeking accreditation and inquiring buyers,” Albert A. Asistores, General Manager at Don Tim Development Corp. said in an online interview.
Digital selling initiatives, such as through Carousell, complementing a real estate developer’s traditional marketing efforts would also “achieve a faster and wider reach towards potential buyers, translating to faster feedback and a shorter selling cycle to generate more sales,” Asistores added.
For buyers with enough liquidity, experts think now is a good time to invest in a property.
JLL Global Research published a report dated March 2020, saying the “real estate continues to offer attractive relative returns in comparison to other asset classes.” Because of the pandemic, many residential and commercial property owners alike may now be looking to sell their properties at a discounted market price. Colliers believes end-users and investors with cash in hand may find more opportunities now in the market and take advantage of chances to negotiate better pricing deals. Young professionals may especially look into the sub-markets for condominiums, and scout for units that still have the potential for future value appreciation.
For SMDC, location, connectivity and convenience should be the top 3 major considerations for real estate investors in the new normal. They see a movement towards integrated lifestyle districts, townships or complete communities, where people have easy access to the essentials – food, medicine, banks, service centers – and are near places of work or the CBDs. They also envision developments looking into providing environments for conducive home offices or home schools, such as study areas, wifi-powered common spaces, co-working spaces, and vast open spaces to allow social distancing. These will give property buyers more flexibility and choices now when they decide to invest.
Business continuity for tenants will depend on their ability to arrange for alternative work sites moving forward.
Aside from considering flexible working arrangements, businesses will also find it valuable to diversify their operations and explore alternative office sites outside Metro Manila or Luzon.
Lobien Realty Group projects that BPOs may soon scout for alternative locations in the emerging provincial hubs which have become sites of new government infrastructure projects.
Colliers identifies Cebu, Iloilo, Bacolod and Davao as viable new locations for property developers and business occupants. Moreover, Colliers believes business continuity plans will have to be carefully revisited and recalibrated so businesses can become more adaptable and resilient moving forward.
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The global outbreak of the COVID-19 situation has indeed made it a trying time for many industries and the property sector is no exception. While the pandemic has brought to fore many challenges, it has also presented opportunities that may be worthwhile to explore. Indeed, many experts believe the property sector remains a promising market for developers, investors, buyers, and sellers alike, who can take the chance on these opportunities under the new normal.