Key real estate sectors urged to recalibrate entering into 2026

December 26, 2025 | 12:00am

MANILA, Philippines — Key sectors in the real estate market are encouraged to recalibrate to address widening pricing gaps, infrastructure bottlenecks and intensifying global competition, as the industry enters 2026.

Leechiu Property Consultants (LPC) said that the residential market remains structurally sound and among the least susceptible to artificial intelligence disruption.

However, it said that the widening price gap between the primary and secondary markets, driven by the stark difference between yield-based valuations and developer-engineered affordability programs, continues to distort pricing.

The real estate brokerage firm said that a more actively traded secondary market, along with a tapering of primary price increases, is recommended to narrow the disconnect and bring primary–secondary pricing premiums closer to global norms.

Office leasing activity, meanwhile, has partly improved as tenants relocate from older buildings to higher-quality stock, taking advantage of compressed rental rates, LPC said.

According to LPC, adaptive-reuse strategies can reposition these properties into modern retail formats, an approach successfully demonstrated in global cities such as Tokyo and London, to address the resulting increase in aging office assets.

It said that such strategy aligns with the country’s’ retail-driven economy, helps absorb high vacancies in older office buildings and offers a more sustainable and value-preserving alternative to full redevelopment.

In terms of retail, LPC said that while traditional mall formats remain effective, evolving consumer behavior calls for more innovative approaches.

Developers are encouraged to explore “urban big-box” concepts and activate outdoor mall experiences, moving away from generic box-type designs.

LPC said the tourism sector also holds strong long-term potential given the Philippines’ source markets and destinations despite lagging behind target visitor numbers.

However, it said accessibility issues and perceived security risks persist.

LPC said that a coordinated national approach is needed to proactively identify emerging destinations and build infrastructure ahead of demand instead of relying on reactive development patterns.

“The Philippines is poised for tremendous long-term value, but only if pricing gaps are tightened, aging assets are revitalized through adaptive reuse and infrastructure investment is accelerated. The country must shift from fragmented sector-specific growth to a unified and sustainable growth pathway,” LPC director of investment sales Tam Angel said.