‘Metro Manila office demand in H1 tops 2023 take-up’

MANILA, Philippines — With more work setups returning onsite, office take-up in Metro Manila for the first half already surpassed the net absorption for full-year 2023, according to consultancy firm Santos Knight Frank (SKF).

From January to June, office demand in the capital region more than doubled to 281,000 square meters from the 125,000 sqm recorded in 2023.

SKF chairman and CEO Rick Santos said the robust demand was due to “return-to-office mandates and office expansions, supported by offshoring operations.”

He noted that the demand from the government and information technology-business process management sectors drove the first-half transactions.

“We expect this to continue as the Philippines remains one of the most competitive offshoring hubs in Asia-Pacific, driven by a young talent pool, affordable operating costs, and a robust supply of office spaces,” Santos said.

SKF senior director Morgan McGilvray said that the office vacancies in Metro Manila also improved in the first six months as companies committed to long-term workplace strategies.

Taguig is said to be the most preferred office choice, with a vacancy rate of 14.5 percent, which is lower compared to the average occupancy rate of 18.9 percent in the metropolis.

Makati, meanwhile, has continued to command the highest average asking rent at P1,256 per sqm a month, higher than the overall average of P1,022 per sqm a month.

Around 127,000 sqm of office stock were said to have been delivered in the first half, while more than 299,000 sqm is expected later this year. An additional 360,000 sqm is also projected through 2027.

Santos expressed optimism that the property market in the region would hit pre-pandemic levels soon, seeing a promising outlook for Philippine real estate.

“While the past years have been challenging for real estate, particularly the commercial sector, 2024 is set to be a turning point with significant upticks and tailwinds across all asset classes,” Santos said.