Transportation-related government infrastructure projects are emerging as significant drivers of residential real estate demand in the Philippines, according to industry experts. During a briefing in Taguig City on Wednesday, February 11, 2026, Dino Palanca, Research and Marketing Director at KMC Savills, emphasized that these initiatives are enhancing connectivity and stimulating property development.
Residential Market Dynamics
Palanca noted that existing residential stock has decreased as developers shift focus following past oversupply issues. He highlighted ongoing growth in key areas such as Cavite, Laguna, Batangas, Rizal, and Pampanga, even though the latter is farther from Metro Manila. "The drivers are evident. We're grateful that the government has stepped in to build infrastructure projects and interconnect businesses. This not only makes travel and business more convenient but also connects us regionally to areas of opportunity," Palanca stated.
Office Space Demand Drivers
In the office market, John Corpus, Executive Director for Tenant Representation at KMC Savills, identified specific sectors fueling demand. Healthcare, financial technology, information technology, game development, and robotics within the IT-BPM sector are key contributors to the need for office spaces. This trend underscores the growing influence of technology-driven industries on commercial real estate.
Retail and Logistics Expansion
For retail spaces, Alex Samuel, Director for Consultancy and Valuation, observed a shift toward large-format operations like big supermarkets. Smaller formats, such as food carts and small store branches, have not grown as rapidly as anticipated. "Traditional formats with larger scale are more stable for retailers," Samuel explained. Additionally, Ninoy Tea, Executive Director for Investment Services, pointed out that warehousing, logistics hubs, and distribution centers are boosting the retail segment. "We've seen exponential growth in logistics hubs, and we expect this to continue over the next five to 10 years," Tea added.
Hospitality Opportunities
The hospitality segment is also seeing growth, with hotels and accommodation facilities in Subic, Zambales, and Bohol benefiting from military exercises and tourism. These areas present great opportunities for investors looking to capitalize on regional developments.
Policy Recommendations for Growth
To further bolster investor confidence in the domestic real estate market, KMC Savills executives proposed several policy changes. They emphasized the need to:
- Lift the moratorium on new economic zones in Metro Manila accredited by the Philippine Economic Zone Authority.
- Provide incentives for tenants supporting green and sustainable initiatives.
- Increase leeway on foreign ownership to aid the manufacturing sector.
These measures aim to enhance the sector's competitiveness and sustainability, aligning with broader economic goals. The insights from KMC Savills highlight a robust real estate landscape driven by infrastructure, technology, and strategic policy support in 2026.
