Office space development seen at record high in 2014
Office space development in the Philippines is poised to hit an all time high this year with around 480,000 square meters of office space expected to be made available by year-end.
“Approximately 480,000 square meters of new office space is slated for delivery by year-end, with close to 45 percent already introduced as of the first half of 2014,” a report made by global commercial real estate company Colliers International specified.
In an interview with reporters on Wednesday, Colliers Director Julius Guevara said the amount of office supply expected to arrive within this year will reach an all time high, pointing out that the last time the country had a record number of office space was in 2009 with 467,000 square meters of space built.
“We are reaching all time highs. The vacancy rates are still low at four percent to five percent. The market continues to be strong,” Guevara said.
He noted, however, that there is still possibility that the 480,000 square meters of space wont be achieve by year end because there are some companies that may miss their target completion date.
Also, Guevara said that the Business Process Outsourcing (BPO) is the biggest off-taker of office spaces at this point.
“BPO is absorbing most of the office supply. The absorption of these spaces will not supply,” Guavara further said.
In the second quarter of this year, five office buildings comprised of almost 130,000 square meters of office space were completed in Metro Manila.
“Five new buildings were completed in the period, all of which are located outside the Makati CBD [Central Business District]. Close to 130,000 square meters of new space are delivered, with more than 270,000 square meters slated for completion by year-end,” Guevara said in his presentation during the Collier’s property outlook briefing held in Makati.
For his part, Colliers research analyst Romeo Arahan said aside from Metro Manila, Cebu is the second option of office space developer because of the demand.
“Cebu is the second best option next to Metro Manila [in terms of the demand]. Next to it is Davao and Iloilo. The manpower is sustainable in those areas,” Arahan further said.
On the residential side, meanwhile, the overall outlook of the company is not that bullish.