COVID-19 vaccine rollout to boost ‘market euphoria’ in real estate

The availability of vaccines against the coronavirus disease 2019 (COVID-19), along with other factors, is expected to create a "market euphoria" in the real estate sector next year, following the drop caused by the pandemic in 2020.

According to Leechiu Property Consultants (LPC), a rollout of the vaccine will boost the growth of the industry next year with increased activity in several sectors such as retail.

"We have every confidence that the rollout of the vaccine in 2021 will create unprecedented market euphoria that will dramatically benefit the real estate industry," LPC chief executive officer David Leechiu said in a virtual briefing on Tuesday.

"A confluence of factors – from record-low, long-term interest rates, to the country’s fantastic fiscal fundamentals that have resulted in good credit ratings, to newfound mobility and tourism opportunities from a massive injection of infrastructure projects– will ensure that," he added.

Earlier this week, vaccine czar Carlito Galvez Jr. said talks on procurement of the vaccines are ongoing and are being sped up, but contracts are likely to be signed by January 2021.

Data released by LPC showed that the retail sector is already showing signs of increasing activity, as sales have bounced back to 47% - 75% of sales in pre-pandemic times during the third quarter of the year.

This comes even as vacated spaces were recorded at 540,000 square meters in the fourth quarter, with 51% or 277,000 square meters attributable to Philippine offshore gaming operators (POGOs) and 33% or 179,000 square meters from other players struggling to recover from COVID-19 losses.

Still, LPC said rents are holding up owing to the presence of information technology-business process management (IT-BPM) firms and multinationals that would take over PEZA-accredited spaces from POGOs.

"Developments in the last two quarters have created compelling opportunities for IT-BPM players. We are thus confident that they will continue expanding in the country which remains a leading outsourcing arena for global businesses now seeking to cut costs and recover from COVID losses," Leechiu said.—LDF, GMA News