Blab Business
Depressed Property Valuations Dampen REIT Interest, Yet Offer Buying Opportunities for Investors
Depressed property valuations are making it less attractive for Philippine developers to launch new real‑estate investment trusts (REITs), according to David Le Leechiu, CEO of Leechiu Property Consultants. In an interview with The Manila Times, Le Leechiu said the current market conditions are not favorable for additional REIT listings, but that the low valuations could still be an entry point for investors.
Le Leechiu explained that REITs allow property owners to raise capital by offering income‑generating real‑estate assets to public investors. Market valuations are a key factor in the pricing and demand for a REIT offering. "The property market valuations are so low today, so it's best for REIT listings to wait," he told the newspaper.
Despite his cautious stance on new listings, Le Leechiu said the present environment presents an attractive opportunity for investors looking for long‑term exposure to Philippine real estate. "It's a great time to buy property stocks and stocks in general in the Philippines because we're so undervalued compared to other markets," he said.
When asked what would define the property market in the second half of 2026, Le Leechiu highlighted tourism as a potential growth driver. He noted that the business process outsourcing (BPO) industry continues to support demand for commercial real estate, and that stronger tourism activity could provide an additional boost.
Leechiu’s director for research and consultancy, Roy Golez, added that developers are expected to keep prioritising ready‑for‑occupancy (RFO) residential units over new project launches. "I think the developers will continue to push the ready‑for‑occupancy units," Golez said. "You will still see not as many launches, but because of the stretched payment terms, I think the demand will be stable."
Golez also said that demand for housing remains resilient despite macroeconomic and geopolitical challenges, although developers and buyers remain cautious amid elevated inventories, affordability concerns and broader economic uncertainty.
The Philippine Stock Exchange’s property index finished up 23.11 points or 1.24 percent on Friday, with the benchmark PSE index closing up 1.01 percent.
In unrelated news, several Northern Luzon provinces were placed under Signal No. 1 due to Super Typhoon "Inday," a move that could affect local real‑estate activity.
The comments come as the Philippine property market continues to navigate a period of lower valuations. Analysts have noted that while the market is attractive for long‑term investors, the timing of a REIT launch remains uncertain until valuations recover.
The industry’s current focus on RFO units and the stability of demand suggest that developers are managing inventory risk carefully. The BPO sector’s continued growth and the potential for tourism‑driven demand provide a backdrop for a gradual recovery in property values.
The situation remains fluid, and investors will likely monitor upcoming quarterly reports from major developers, as well as any regulatory announcements that could influence the timing of future REIT listings.
In the coming months, stakeholders will watch for updates on the Philippine Stock Exchange’s property index, any changes in the BPO and tourism sectors, and the impact of weather‑related disruptions in Northern Luzon. These factors will shape the trajectory of the property market and the attractiveness of REITs as a vehicle for capital raising.
Le Leechiu explained that REITs allow property owners to raise capital by offering income‑generating real‑estate assets to public investors. Market valuations are a key factor in the pricing and demand for a REIT offering. "The property market valuations are so low today, so it's best for REIT listings to wait," he told the newspaper.
Despite his cautious stance on new listings, Le Leechiu said the present environment presents an attractive opportunity for investors looking for long‑term exposure to Philippine real estate. "It's a great time to buy property stocks and stocks in general in the Philippines because we're so undervalued compared to other markets," he said.
When asked what would define the property market in the second half of 2026, Le Leechiu highlighted tourism as a potential growth driver. He noted that the business process outsourcing (BPO) industry continues to support demand for commercial real estate, and that stronger tourism activity could provide an additional boost.
Leechiu’s director for research and consultancy, Roy Golez, added that developers are expected to keep prioritising ready‑for‑occupancy (RFO) residential units over new project launches. "I think the developers will continue to push the ready‑for‑occupancy units," Golez said. "You will still see not as many launches, but because of the stretched payment terms, I think the demand will be stable."
Golez also said that demand for housing remains resilient despite macroeconomic and geopolitical challenges, although developers and buyers remain cautious amid elevated inventories, affordability concerns and broader economic uncertainty.
The Philippine Stock Exchange’s property index finished up 23.11 points or 1.24 percent on Friday, with the benchmark PSE index closing up 1.01 percent.
In unrelated news, several Northern Luzon provinces were placed under Signal No. 1 due to Super Typhoon "Inday," a move that could affect local real‑estate activity.
The comments come as the Philippine property market continues to navigate a period of lower valuations. Analysts have noted that while the market is attractive for long‑term investors, the timing of a REIT launch remains uncertain until valuations recover.
The industry’s current focus on RFO units and the stability of demand suggest that developers are managing inventory risk carefully. The BPO sector’s continued growth and the potential for tourism‑driven demand provide a backdrop for a gradual recovery in property values.
The situation remains fluid, and investors will likely monitor upcoming quarterly reports from major developers, as well as any regulatory announcements that could influence the timing of future REIT listings.
In the coming months, stakeholders will watch for updates on the Philippine Stock Exchange’s property index, any changes in the BPO and tourism sectors, and the impact of weather‑related disruptions in Northern Luzon. These factors will shape the trajectory of the property market and the attractiveness of REITs as a vehicle for capital raising.
