PUBLICLY listed property developer Arthaland is shifting its direction toward residential projects amid the slow recovery in the office sector as companies continue to implement work-from-home (WFH) and hybrid work setups.
“For the time being, we are focusing on residential projects for the simple reason that we need to understand what is the full impact of WFH and hybrid setups that many companies are implementing driven mostly by the young employees as well as the impact of artificial intelligence in what might result in change in the way work is being performed,” said Arthaland’s president Jaime González during the company’s Annual Stockholders’ Meeting on June 28, 2024.
“Until we fully understand its impact, we are being very careful in implementing projects involving office space. For these reasons, we will have a strong focus on residential projects,” he added.
A report, quoting a real estate consultancy group JLL, said that the country’s office vacancy level remains high and is expected to persist for a couple of years, with full recovery potentially taking up to five years.
Vacancy rate in the National Capital Region was at 19.9 percent in the first quarter of 2024 from 17.8 percent in the same period last year. An estimated 500,000 square of new office space stocks will be available by the end of the year, translating to a projected average vacancy rate of 20 percent by the end of 2024.
The shift towards WFH and hybrid setups has become more pronounced during and post-pandemic due to several reasons such as advancements in technology enabling remote work, employers recognizing the benefits of flexibility and employees valuing the work-life balance it offers.
Arthaland has office and residential projects in Cebu City—Cebu Exchange Tower and Lucima—located in Cebu IT Park and Cebu Business Park, respectively.
Lucima is the company’s first residential project in Cebu City. It is a 37-story development that sits on 2,245 square meters of prime real estate at the corner of Cardinal Rosales Avenue and Samar Loop in Cebu Business Park. This high-end residential project is slated for completion in September this year with turnover to unit owners to start in the fourth quarter.
Meanwhile, as they focus on building more homes, González said they will establish its presence in the broader mid-market segment while also continuing to offer products in the upscale and luxury residential segments.
“There is a strong demand both in the high-end and the mid-market segments. But, we believe that high-quality sustainable development is for all segments not only for the high-end,” he said.
González stressed they will continue to pursue developments aggressively for both markets, noting that “sustainability is for all.”
Moreover, the company announced significant progress in its land banking initiatives, saying that it is nearing the finalization of two deals: a 3.6-hectare property in Metro Manila and a five-hectare site in the southern part of the country. / KOC