Metro Manila office vacancy expected to worsen by end-2023

MANILA, Philippines — Vacancies in offices in Metro Manila improved in the first quarter, but Colliers Philippines projected this would worsen by the end of 2023 as take-up remains anemic.

Data provided by the professional services and investment management firm showed that office vacancies in the National Capital Region could likely hit 21% this year, higher compared to their previous outlook of 20.2%. 

Colliers attributed their projection to two key factors: slower take-up and completion of new office spaces in the country’s economic center.  

That said, office vacancy in NCR inched down 18.7% in the first three months. This was a slightly better showing compared to the 18.8% recorded in the final quarter of 2022. 

“Among the notable transactions in Q1 2023 included spaces leased by Telus in Quezon City, Work.Able in Ortigas CBD, Office of the Solicitor General in Makati central business district and IGT Solutions in Alabang,” the emailed commentary read. 

Businesses and firms temporarily vacated office spaces in Metro Manila as the pandemic forced remote work arrangements in 2020. Despite marginal improvements in office space uptake in months that came, the national government was still keen on sending workers back to offices to revitalize an informal economy that benefits from foot traffic in urban centers. 

The move did not go unnoticed since two years later, the national government relented its earlier decisions to strip tax incentives, among others, from the IT-BPM sector if they did not troop back to offices. Firms in the industry are registered under the Philippine Economic Zone Authority, which awards these benefits in part.

Data from Colliers likewise showed that new office space built in the first quarter amounted to 48,000 square meters. The firm expected this figure to amount to 569,100 sqm by the end of 2023. — Ramon Royandoyan