A good year

The Metro Manila office market is on track to posting record-high supply and net take up for 2018, according to global real estate service company Colliers International.

In a recently released report, Colliers noted that outsourcing firms continue to expand and account for the largest share of transactions.

In terms of demand, Colliers expects this to reach 1.15 million square meters while supply is projected at 1.18 million sqm for the whole of 2018.

It projects a net take-up of 344,000 sqm during the fourth quarter, and an annual net take-up of 800,000 sqm from 2019 to 2021.

As far as supply is concerned, the report estimates the completion of 310,000 sqm of leasable space in the fourth quarter. From 2019 to 2021, Colliers also expects the completion of 2.66 million sqm of new leasable space or 890,000 sqm annually.

Colliers also said that from 2019 to 2021, average rent across Metro Manila will rise by nine percent annually on the average, with Ortigas Center and the Bay Area recording the fastest acceleration in rents during the period.

In terms of vacancy, it projects Metro Manila vacancy to reach five percent by end of 2018, or a 0.3 percent decline from last year. Meanwhile, from 2019 to 2021, it expects a year-end vacancy of between 5.3 and 5.9 percent.

In the report, Colliers encouraged developers to provide flexible office floor cuts,  implement creative leasing schemes, and offer non-Philippine Economic Zone Authority (PEZA) proclaimed buildings to offshore gaming firms.

It also suggested that tenants that need to occupy space in the next 12 to 24 months should start pre-leasing and locking in rates in Ortigas Center.

Collier, likewise, asked knowledge process outsourcing (KPO) and multinational corporations to consider office space in Fort Bonifacio that will likely be  vacated from the fourth quarter of 2018 to 2019.

For the residential sector, it estimates total demand for 2018 to be lower at 4,800 units. It said local professionals and Chinese offshore gaming employees continue to drive demand in the secondary market. From 2018 to 2021, demand is expected to average 8,200 units yearly.

As for supply, it is projected to be higher at 9,600 units for 2018, while that for 2018 to 2021 is seen averaging 8,700 units annually.

Residential rents for the whole of 2018 is estimated to grow by only 0.6-1 percent on the average, while that from 2019 to 2021 will increase by only 0.3-0.4 percent yearly due to delivery of more units into the secondary market.

In terms of vacancy, the report sees it at about 11 percent by end-2018, a rate that will continue until 2021.

Colliers explained that a mix of demand from offshore gaming employees and local professionals is helping sustain the Metro Manila residential market. It noted that vacancy in the secondary market continues to drop despite an aggressive completion of new units in the third quarter of 2018.

To seize opportunities in the sector, Colliers recommends that developers pursue more projects in the peripheries of established business districts, tap the rising demand for worker housing, tie up with the government for the skills upgrading of construction workers, push for the entry of 100 percent foreign-owned contractors, and be more flexible to the residential demand of offshore gaming operators.

Finally, for the retail sector, Colliers said the food and beverage segment remains as the major driver of retail space occupancy in Metro Manila.

The report sees opportunities in home furnishing especially with the entry of major foreign brands and more pronounced completion of condominium units across Metro Manila.

Colliers encouraged developers to look at the viability of housing more high-end shops in the Bay Area, to continue offering a differentiated mix of retailers to consumers, to carve out co-working space in new malls, and to curate retail offerings based on the growth of consumer spending sub-segments.

Justice delayed

While many Samarenos, particularly those from Eastern Samar, are still rejoicing over the return of the three Balangiga bells which the Americans took with them as war trophies following the Balangiga massacre in 1901 during the Philippine-American war, many from Catbalogan City feel that justice continues to be denied to them.

The Office of the Ombudsman issued two orders last Nov. 26 preventively suspending Catbalogan City Mayor Stephany Tan, vice-mayor Art Sherwin Gabon, Sangguniang Panglungsod (SP) members Coefredo Uy, Jeffry Uy, Maximo Pescos, Edward Uy, Christine Joy Escober, Beethoven Bermejo, Nanette Jasmin, city accountant Peachy Daguman, city assessor Romero Tuazon, Arthur Macabare, and Rizal Ignacio for a period not exceeding six months without pay while cases that have been filed against them are pending.

The first stemmed from respondents’ alleged purchase of agricultural lands at a price of P120.2 million from certain private individuals compared to a market value of only P155,497.

The Ombudsman noted that the eight hectares, financed by a loan from the Development Bank of the Philippines, were purchased at a cost of P120.2 million or P1,500 per sqm, which it said is exorbitant compared to the P2.10 per sqm which the city government offered to another property owner.

It also emphasized that the conversion from agricultural to other uses of the properties prior to the purchase is unacceptable, “reeking with conspiratorial scheme to give unwarranted benefits to the property owner.”

A second order approved by Ombudsman Samuel Martires is for giving Philippine Primark Properties Inc. unwarranted benefits when the respondents allowed the company to lease the city public market.

So what seems to be the problem?

It is the Department of Interior and Local Government that is tasked with serving and implementing the suspension order, but it seems that the DILG is taking its sweet time in doing so.  

And so while the case is pending, the Catbalogan city officials are still in their offices and getting their salaries when they should already have vacated their posts had the DILG implemented the order.

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