The office property market likely had a “record-breaking” year, with the total office space absorbed in Metro Manila in 2016 growing by as much as 30 percent, a property analyst said.
In a recent interview, Leechiu Property Consultants (LPC) chief executive officer David Leechiu told The Manila Times that total office take-up for the year could reach 750,000 square meters.
“Something close to 700,000 square meters of space [were]taken up in the market,” Leechiu said in an interview last week.
Leechiu emphasized that the firm has yet to finalize 2016 takeup figures.
750,000 sqm would be “a record for the Philippines. Very few cities in the world have that much take up,” the property analyst said.
As of November, a total of 630,000 sqm had been taken up year-to-date. This is already 9.2 percent higher than the 577,000 square meters of office space absorbed for the full-year in 2015.
The robust Business Process Outsourcing (BPO) sector continues to be the main driver of the office space take-up.
LPC noted that 78 percent of the 630,000 square meters of office space absorbed by the market is destined for the information technology and business process management (IT-BPM) industry.
“The IT-BPM industry relentlessly drives the demand for the office space in Metro Manila, retaining a share above 60 percent for 2015 and 2016,” Leechiu said.
In 2015, the IT-BPM sector accounted for 66 percent of the total office space demand.
Among other industries that contributed to the office space takeup in 2016 were banking/finance, which accounted for 6 percent of the takeup; healthcare/pharmaceuticals at 3 percent; fast-moving consumer goods at 3 percent, and telcommunications at 3 percent.
Leechiu noted that apart from the Metro Manila office market, a significant amount of office space was also taken up outside the country’s capital.
“And there’s probably about another 120,000 square meters taken up in the provinces, mainly in Cebu and Davao,” Leechiu said.
Moreover, Leechiu noted that with the continued demand for office spaces, rental rates are at an all-time high.
“So in Bonifacio, we’re now doing a low of P900 to a high of about P1300 per square meter,” Leechiu said.
In contrast, rental rates in Makati are hitting the P1300 to P1400 level per square meter.
“Quezon City is touching P650 to P700. Alabang, P650, Cebu P650 [per square meter],” Leechiu said.