NOTING delays in the completion of development projects in the third quarter, real estate consultancy firm Colliers International said the supply of office space in the country this year might be less than it earlier forecast.
However, Julius Guevara, Colliers’ director for research and advisory services said the consultancy group still expects an all-time high 503,000 square meters of new office space by the end of 2015.
Earlier this year, Colliers forecast that at the end of 2015, close to 576,000 square meters of usable office space would be delivered, 43 percent of which will be located in Fort Bonifacio, an emerging central business district at the southern part of Metro Manila.
“Several planned projects were pushed back in terms of completions to 2016 and 2017,” Guevara noted during Colliers’ third quarter property briefing at the RCBC Plaza in Makati on Monday.
Guevara said this could result in a difference of around 50,000 square meters in the expected total supply of office space in the country.
Meanwhile, office rents in major business districts in Metro Manila grew by an average of 1.8 percent during the quarter, according to him, continuing the robust rental growth seen since the start of the year.
Estimated completions in 2016 and 2017 would also reach new heights, Guevara said, putting pressure on both rents and occupancy levels.
Guevara said changes in the office property market, especially in the third quarter of 2015, might have an impact on the occupancy and rental levels in the beginning of 2016.
“Rental levels have soften in some areas like the fringe, and our forecast next year is that rents will drop by about 5 to 10 percent, depending where you are in the city,” he said.
Guevara also noted that some developers are already closing leasing deals in fringe areas, with net effective rents that are slightly lower than their headline rates in order to gear up for the high supply coming in the next couple of years.