MANILA, Philippines - Annual demand for office space in Metro Manila is at an all-time high and already the year 2012 has overtaken the record of 360,000 sqm. set in 2011, according to global real estate services firm Jones Lang LaSalle Leechiu (JLLL). Moreover, a strong preference for spaces in Bonifacio Global City has been noted.
From January to October this year, office take-up in the metropolis registered at 230,000 sqm., observed Sheila Lobien, JLLL director for project leasing. Of the 445,000 sqm. of new office space available in the market for 2012, already 325,000 sqm. were leased (142,000 sqm. or 32%) and pre-committed (183,000 sqm. or 41%). It is expected that the bulk of the balance of 120,000 sqm. will be leased before year-end. “We have recorded 413,000 sqm. in the first 10 months of 2012. Matched with a very low vacancy rate of four percent across all the business districts, these figures appear to indicate rising business confidence.”
She disclosed that Bonifacio Global City (BGC) registered the lower vacancy of 25,000 sqm. versus Makati’s 43,400 sqm. Since 2011, BGC has been consistently gaining the highest figures for pre-committed space among the leading business districts. She notes, “We see Bonifacio Global City emerging as a preferred location. Interest in BGC developments still under construction – such as the 26-storey W Fifth Avenue – runs high. Despite the fact that the building is set to be completed only in the second quarter of 2013, firms are already committed to take up space in the project,” according to Lobien.
W Fifth Avenue will add 33,000 sqm. of office space to Bonifacio Global City and is accredited by the Philippine Economic Zone Authority (PEZA), entitling locators in the building to tax incentives. It is located on Fifth Avenue, a main artery of BGC that will also be the address of the Philippine Stock Exchange building and a six-star Shangri-La Hotel. It offers locators high visibility as well as access to the emerging district’s key institutions.
Lobien noted that Bonifacio Global City has become the top choice of local and multinational firms because of the well-planned development of the area. In addition, it is just a few kilometres from Makati CBD. Notwithstanding these attractions, rent at the former military base is still at a discount to that of Makati. Rent in BGC ranges from P650 to P800 per sqm. per month, in contrast to Makati’s P700 to P950 per sqm. per month.
“Many corporations realize it is a good time to take a position in Bonfiacio Global City,” Lobien said. “Space in BGC is being taken up not just by BPOs and call centers, but also by brick-and-mortar firms such as the nation’s largest insurer and a global beverage brand, among others.”
Lobien added that buildings with accreditation from the Philippine Export Zone Authority (PEZA) like W Fifth Avenue are sought after by BPOs in particular. While a number of new buildings are coming up, not all are entitled to incentives. The latest PEZA-accredited building in the Taguig business district was fully committed to clients about five months prior to its completion.
W Fifth Avenue is the third boutique office building project of The W Group. It has a typical floor plate of approximately 1,700 sqm.