In a world where change is the only constant, keeping a finger on the pulse of evolving urban landscapes is not just a necessity. It's a strategic imperative.
KMC Savills, a recognized leader in real estate services in the Philippines, has embarked on an ambitious journey to map the future of Philippine regional cities. Their recently launched comprehensive report is a testament to their commitment to helping shape the urban landscapes of tomorrow.
The Philippine archipelago is a diverse tapestry of cultures, landscapes, and opportunities.
Beyond the bustling metropolis of Manila lie regional cities that are the economic engines of their respective regions. KMC Savills' forward-thinking initiative to delve deep into the development and transformation of these cities is a welcome endeavor. It's a testament to their belief in the potential of the Philippines' regional urban centers and their recognition that urbanization is not confined to the capital alone.
In Metro Clark, the market continues to struggle with its vacancy rate rising to 33.6 percent in 1H/2023 as one of the few remaining vestiges of the POGO sector leaves. Office buildings outside of CFZ have performed better, with their vacancy rate averaging 25.3 percent in the same period.
In Davao, KMC Savills Associate Director Joshua De Las Alas reports that the city’s overall vacancy rate dropped to 6.4 percent from 12.1 percent at the end of 2022. The market has continuously outperformed expectations after the vacancy rate peaked at 21.9 percent in 3Q/2021. Davao remains one of the most affordable markets in the country amidst the influx of demand from outsourcing firms. KMC Savills forecasts that the current demand trend may allow developers to rethink their regional strategy.
In Iloilo, KMC Savills Chief Operating Officer Cha Carbonell shared that the city’s overall vacancy rate rose to 8.1 percent after completing Cybergate Iloilo Tower 2 in Pavia. Grade B stock saw a massive drop in vacancy rate to 13.1 percent from 22.7 percent at the end of 2022. The report is optimistic that vacancy rates should remain in single digits despite another 22,500 sq m of new office space in 2H/2023.
In Bacolod, market occupancy remained low, with a vacancy rate of 13.5 percent, as demand continued to struggle. Leasing activity may improve in the coming quarters as demand is expected to spill over from neighboring Iloilo. Conditions are expected to be static in the next term, but leasing activity has recently increased.
The report's focus on the real estate sector fosters a conducive business environment. Assessing office spaces, residential properties, and industrial areas is essential for businesses, as it aids them in making informed decisions about their investments and operations in these cities.
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