Manila office vacancy still low – Colliers

MANILA, Philippines – Metro Manila office vacancy will continue to remain low until next year due to delays on the completion of several projects, according to real estate services firm Colliers International Philippines.

“Year-end supply forecast was adjusted from 880,800 to 760,100 square meters due to some projects slated for completion in fourth quarter of 2016 being delayed to early 2017,” Colliers said in its first quarter office market report for 2016.

“This shows there is ample space to absorb the expected demand through 2016. This assumes however, that there will be no significant delays in construction which will push completion dates further to 2017,” it added.

On a location basis, Colliers said supply forecast per area and vacancy levels remained largely the same with Fort Bonifacio getting the lion’s share of the upcoming office supply.

As of the first three months of the year, overall office vacancy increased from two percent to three percent.

Colliers said the slight increase is mostly due to new completions during the quarter and not due to softening demand.

“Despite this, there continue to be opportunities for companies to expand within Metro Manila, considering that supply levels are still at historical highs. Alternative office locations such as Quezon City and Alabang are expecting an influx of supply in the next two years.  Rental rates in these locations are within acceptable thresholds for BPO/contact center companies, making them viable options,” Colliers said.

Metro Manila office demand reached 155,000 square meters during the quarter and yearend demand is projected to jump 11 percent.

“Similar to previous years, demand is expected to increase significantly towards the tail end of the year. Colliers sees demand growing by 11 percent this year to 704,000 square meters on the back of positive first quarter 2016 results and a 52 percent pre-commitment level for buildings due within the year,”  Colliers said.