Demand for ofc space seen growing 25% this year

MANILA, Philippines - Demand for office space in Metro Manila is expected to grow to 721,000 square meters by the end of the year or 25 percent more than the previous year’s take up, according to Leechiu Property Consultants.

In a press briefing yesterday, Leechiu Property Consultants’ CEO David Leechiu said the year-to-date take up has already reached 600,000 square meters, already exceeding last year’s demand.

“What demand has reached in a full year last 2015, we have attained in under nine months,” he said.

 Bulk of the office space take up during the 10 months to October is in Bonifacio Global City in Taguig (64 percent), followed by Quezon City (17 percent), Alabang (eight percent) and Ortigas and Makati, accounting for four percent each.

The Bay area in Parañaque accounts for three percent of office space demand.

 Last year, BGC also accounted for the biggest chunk of the office space take up of 577,000 sqm. at 35 percent while Makati followed at 28 percent. Ortigas accounted for 18 percent while Quezon City had a 12 percent share. Alabang, meanwhile, had a six percent share.

“Bonifacio Global City remains to be the undisputed preferred location for tenants. Quezon City is the preferred destination for BPO expansion,” Leechiu said.

 Meanwhile, he said bulk of the demand for office space comes from the business process outsourcing (BPO) industry.

Leechiu said the BPO industry continues to grow steadily that revenues from the sector may soon surpass the country’s dollar remittances — which together comprise the economy’s “strong legs.”

 He sees continued growth from the BPO sector, especially from European companies affected by UK’s exit from the European Union.

 Leechiu said demand for office space would steadily grow.

 As of October this year, he said there is already a record number of 361,000 sqm of pre-commitments for office space for next year.

“BGC, Quezon City and the Bay Area will nearly double their office space stock in the next six years. The future office supply will mostly come from BGC, followed by Ortigas/Pasig/Mandaluyong and Quezon City,” Leechiu said.

The current vacancy rate in Metro Manila is now at an all time low of four percent, he added.

Outside Metro Manila, Leechiu said developers would also beef up their respective portfolio in the provinces to meet the BPO industry’s growing demand.

At present, there is an existing supply of 1.31 square meters of office supply across the different provinces, bulk of which or 476,000 sqm are in Cebu.