Affluent consumers seen keeping high-end tourism afloat. | Philbizwatcher
“If your revenues are anywhere between 40 to 60 percent down or zero, then still maintaining 50 to 60 percent of expenses, then very soon you have to make a capital call and if you don’t make the capital call, your only option is to close,” Leechiu said.
With so many players in the market, Leechiu said the tough environment caused by COVID-19 had become a culling event. In the last eight years, Leechiu noted that monthly ground floor rental space in BGC or Makati had surged from P1,500 a square meter to P3,500 to P4,000 plus value-added tax. With the likely shakeout in this sector, monthly rental rate may ease to P2,500 per sq m for new or newly vacated ground floor space.
On the residential segment, Leechiu said that if all lockdown measures were lifted before July, there might be time to stabilize the residential condominium market. But beyond July, Leechiu said the smaller banks could start calling on unpaid loans, resulting in a “mass liquidation” of assets. He sees the upper-middle income segment—or those with units priced within P15 to P30 million —becoming most vulnerable.
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