Developers seen increasing spending on building upgrades

By Juliana Chloe A. Gonzales

PROPERTY developers are expected to increase spending on structural upgrades, engineering reviews, and business continuity measures following recent earthquakes in Mindanao as buyers and investors place greater emphasis on building safety and resilience, according to property consultants.

Claro dG. Cordero, Jr., director for research at Cushman & Wakefield Philippines, said developers are reassessing structural systems and resilience measures as part of efforts to strengthen the long-term competitiveness of their projects.

He said current evaluations of structural systems and base-isolation strategies are “value-accretive,” with resilience increasingly emerging as a factor that influences leasing terms and capital allocation.

“Resilience is rapidly emerging as a measurable competitive differentiator,” Mr. Cordero said in an e-mailed response to questions on Sunday.

Dino Mari G. Palanca, director for marketing and research at Savills Philippines, said major developers are focusing on redundant building systems and business continuity planning in the wake of the earthquakes.

“They may accelerate inspections, reassess repair-versus-rebuild decisions for damaged assets, and incorporate design features that improve safety, reduce disruption, and enhance long-term asset durability,” he said in a Viber message last week.

“While major developers already design projects in accordance with the National Structural Code of the Philippines, we expect greater focus on resilience measures, structural redundancy, engineering reviews, and business continuity planning,” he added.

The shift comes as buyers become more discerning about the structural quality of properties following the recent earthquakes.

Mr. Palanca said consumers are placing greater emphasis on building quality, structural integrity, developer track records and compliance with seismic standards when making purchasing decisions.

“It is still too early to characterize this as a structural shift in residential demand. However, we are seeing buyers place greater emphasis on building quality, structural integrity, developer track record, and compliance with seismic standards,” he said.

He added that discussions in the market have shifted away from a debate between condominiums and house-and-lot developments and toward the resilience of individual assets.

Mr. Cordero likewise said available data does not point to a broad-based shift away from condominium living despite concerns raised by the earthquakes.

“Demand patterns remain highly differentiated, driven by location, the localized severity of damage, and access to financing,” he said.

“Condominiums engineered to prevailing seismic standards have generally demonstrated strong structural performance, and the market is increasingly attuned to this distinction.”

Apart from new developments, property owners may also need to consider upgrading older assets to improve resilience and preserve value.

Mr. Cordero estimated that seismic upgrades for older buildings typically cost between 10% and 30% of an asset’s replacement value, with more complex commercial structures often exceeding the upper end of that range.

“For owners and commercial landlords, the more consequential analysis involves weighing upfront capital expenditure against the downstream risks of prolonged vacancy, elevated insurance premiums, and asset devaluation,” he said.

“Our assessment indicates that a phased retrofitting strategy, underpinned by clear regulatory timelines and, where available, financing incentives, enables owners to manage capital outlay in a measured manner while reinforcing portfolio resilience and protecting long-term asset value.”

Mr. Palanca said such investments may weigh on short-term returns but are necessary to maintain tenant confidence and improve insurability.

Regarding the market outlook, he described recovery following major seismic events as “characteristically phased,” with an initial stabilization period lasting six to 18 months and full recovery typically taking three to five years.

Mr. Palanca said major urban markets generally normalize within several quarters, although areas that sustained extensive physical damage and infrastructure losses will likely require longer and more capital-intensive recovery efforts.