News release

Logistics and REITs bright spots to real estate

While JLL Philippines anticipates slow recovery for the real estate landscape, bright spots such as logistics, co-living, and growth of REIT are seen to keep the industry afloat.

January 29, 2021

Asi While real estate consultancy firm JLL Philippines anticipates slow recovery and subdued demand for the hospitality, residential, retail, and even office markets, bright spots are seen to keep the country’s real estate industry afloat with the emergence of alternative assets such as logistics and co-living sectors, as well as the growth of real estate investment trusts (REITs).

In its first thought leadership webinar for the year, JLL Philippines shared its 2020 review and 2021 outlook on the real estate landscape, which was heavily impacted by the pandemic across the board.

Janlo de los Reyes, JLL Philippines’ Head of Research and Consultancy, explained that the retail and hospitality sectors—two of the most severely affected sectors in 2020—share the same narrative where occupancy levels have dipped across the board, whether in Metro Manila, Metro Cebu, or Metro Davao.

While the resumption of hotel operations in Q4 2020 may have improved occupancy levels, owing to the influx of returning overseas Filipinos driving interim demand in time for the holidays, occupancy growth was still weaker compared to the same period in 2019.

In the residential condominium market, there is still a softening demand of pre-selling projects, mostly seen in low- to mid-tier developments, which have pulled market prices down. De los Reyes explained that the buyer profile, mostly overseas Filipinos and middle-class, have been delaying big-ticket purchases due to the pandemic.

Similarly, as majority of investors deferred acquisition plans last year, the investment market slowed down, causing a decline in investment transaction volumes in the Philippines.

Office to stay relevant

de los Reyes said office space demand dipped mainly due to the weakening of online gaming activities, which was one of the main demand drivers in the previous years. The offshoring and outsourcing sector also recorded weak take up as companies put their entry and expansion plans on hold.

Despite this, de los Reyes said office space will remain relevant. “Some key elements that will shape this narrative are the availability of vaccine, focus on safety and wellness, evaluation of space requirements by function and by industry, and optimization of costs.”

During the webinar, Gonzalo Portellano, JLL’s Head of Portfolio Design for Asia Pacific, also underscored the continued relevance of the workplace. He discussed The A-Z of Future Workplace Design which answers key issues that organizations are concerned about as they transition to the next normal.

“We are moving from functional briefs about how to design the workplace to identifying the purpose of the workplace: socializing and innovating; the culture of pride in belonging to that organization; the ability of that organization to engage employees and provide a positive experience; health and well-being; and ultimately, the identification of the employees with the brand,” he expounded. 

“Some of these aspects are intangible but equally important to address in a holistic way the return to the office and the workplace of the future.”

Webinar panelists Cathy Saldaña (Principal/CEO of PDP Architects), Francis Roxas (Chairman of AREIT Property Managers), and Lyndon Lim (Principal or Baring Private Equity Asia Real Estate) concurred by highlighting the importance of the employees’ health and safety in the continued relevance of the workplace.

“We found that if we institute safety goals, people will want to come to work,” said Roxas, further emphasizing Saldana’s point on employee engagement amid the pandemic means giving employees a sense of safety, and this should be part of the workplace design.

Bright spots to buoy real estate in 2021

While the majority of 2020 has put many organizations on firefighting mode given the slower-than-expected recovery, the tail-end of the year saw the gradual adjustment of real estate stakeholders to the next normal.

“More companies are now looking at how they can position their real estate portfolios for growth in 2021,” said de los Reyes. “The overall market sentiment has been positive so far, especially with the reports on the roll-out of the vaccine serving as one of the bright spots.”

First is the commencement of the REIT market in the country, which JLL has identified to be a bright spot in the next normal.

“We anticipate more developers to be looking into this market to diversify their portfolio and to tap new capital to expand their real estate” said de los Reyes. “This is in line with what we're seeing in the investor market, where investors are looking at income generating assets and stable returns which REITs offer.”

Another bright spot is the growing interest in the co-living market, which exhibited resiliency even amidst the pandemic with dormitels posting improved occupancy in the second half of the year, with demand coming from young professionals and BPO employees.

“There's a supply gap in the co-living market that we are anticipating in the next two years due to current supply shortage, and this may present an opportunity for new investors to come in,” said de los Reyes.

Lastly is the sustained momentum from the industrial and logistics sector. 2020 saw the highest rate of logistics supply completion in the last five years, which is reflective of the increasing demand for logistics space coming from the booming e-commerce market in the country.

“As we have forecasted in our report, ‘The Evolution of Philippine Logistics: A Case for Better Quality Logistics’, we anticipate that the demand will grow by 160,000 square meters annually in the next 10 years,” said de los Reyes. “We’re also seeing increasing interest for data centers which will support the take up of logistics space in the country.”

To watch the recording of the webinar, “Real Estate Market Q4 2020 Overview & 2021 Outlook (re)imagining the Future of Workplace Design“, please click here.

JLL regularly holds knowledge-sharing events and publishes thought leadership pieces on the latest trends and insights in the real estate market. To know more, follow JLL’s social media pages on Facebook and LinkedIn.

JLL has been operating in the Philippines since 1997 as a 100% wholly owned entity and currently manages about 5.3 million square meters of real estate with a workforce of over 1,400 employees. With more than two decades of local expertise working hand-in-hand with its global legacy, JLL provides to the Philippine real estate market an unparalleled synergy of services with a strong commitment to achieve real estate ambitions through future-ready approaches. For further information, visit

About JLL

JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. JLL shapes the future of real estate for a better world by using the most advanced technology to create rewarding opportunities, amazing spaces and sustainable real estate solutions for our clients, our people and our communities. JLL is a Fortune 500 company with annual revenue of $18.0 billion in 2019, operations in over 80 countries and a global workforce of over 92,000 as of September 30, 2020. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit