Screengrab from Santos Knight Frank presentation
MANILA – Amid the challenges brought by the health and economic crisis that started in 2020, a consultancy firm said the industrial and logistics sector will lead the recovery of the local real estate market.
In a virtual press conference Wednesday, Santos Knight Frank chairman and chief executive officer Rick Santos said industrial and logistics will be the sunshine sector for the property market this year given the rise in demand for warehousing due to the growth of e-commerce and cold chain facilities for the coronavirus disease 2019 (Covid-19) vaccination program.
“Even pre-pandemic there’s a lot of big institutional funds regionally looking to invest in Southeast Asia in industrial and logistics. That market is only constrained by supplies,” Santos said.
With the large appetite for investments both from local and regional sources, he added this sector will lead to the shift of the market and the renaissance of the real estate sector.
Santos Knight Frank director for investments and capital markets Kash Salvador said the Covid-19 pandemic has accelerated the growth for e-commerce that pulled up the demand for warehousing.
E-commerce growth is also estimated to grow by 26 percent this year.
To cater to these demands, some real estate assets are being repurposed as storage facilities, Salvador said.
He said Tutuban Mall in Manila and SM North Edsa in Quezon City are among the brick-and-mortar malls that are repurposing their spaces for storage.
“Malls are repurposing their spaces for storage like Tutuban Mall in Manila and SM North Edsa. Smaller developers are really looking into how they will adopt, how do they take a piece of the pie with the stable and strong demand coming from the industrial and warehousing,” Salvador added.
He said the upcoming infrastructure projects will further allow growth opportunities for commercial real estate, particularly for the industrial and logistics sector.
“More and more investors are actually looking into industrial warehouse and logistics space. It is actually expected that the capital market for this sector will become more sophisticated. We see more venture capitalists have logistics and warehousing space at the top of their priority list when it comes to looking for opportunities in the Philippines,” he added.
In terms of rates, Salvador said they see prices to remain stable in 2021 despite the strong demand because of the additional supply that is coming in this year. (PNA)
