Despite lower rental rates for office spaces in the Alabang property market compared with other central business districts, conglomerate Filinvest Development Corp. (FDC) does not see a lack of demand in the area, a company official said.
In an interview with reporters last week, Filinvest Land Inc. (FLI) Chief Executive Officer & FDC board director Josephine Gotianun-Yap said the growth in rental rates in the Alabang property market is not far behind that of other emerging business districts.
“I think our increases naman are similar to theirs [QC & Bay Area]—with what’s acceptable in the market,” Gotianun-Yap said.
Rental rates of offices spaces in the Alabang office market have been the lowest and have registered flat growth rates in recent quarters compared with other emerging business districts such as Quezon City and the Bay Area.
In a report by real estate consultancy firm KMC Mag Group, the average rental rate in Alabang remained flat in the fourth quarter of 2015 at P605.3 per square meter per month, posting no growth for the year, while Quezon City and the Bay Area both posted upward movements in rental rates at P710.7 per square meter per month and P647.7 per square meter per month, respectively.
FDC’s subsidiary Filinvest Alabang Inc (FAI) is the developer of the 244-hectare masterplanned Filinvest City in Alabang, which houses several office developments such as the Northgate Cyberzone.
Gotianun-Yap pointed out that the firm also has office developments in the Quezon City and Bay Area, and does not see a significant difference in demand in the three business districts.
“We have property in all three. We also have property in Bay Area and we’re also leasing out in Quezon City and we don’t see a marked difference between the three,” Gotianun-Yap said.
Meanwhile, vacancy rates in Alabang showed signs of improvement in the fourth quarter of 2015, as they dropped into single digits at 4.8 percent from 16 percent posted in the previous quarter.
This was due to the better net absorption in the business district, which amounted to 46,000 square meters during the quarter.
Lacking labor pool
According to KMC Mag Group Associate Director for Office Leasing Rosario Carbonell, what makes Alabang slightly lag behind Quezon City and Bay Area is its lack of labor pool.
“There’s a lot of supply in Alabang but in terms of labor pool and salary, it’s the same in Metro Manila,” Carbonell said.
Carbonell noted that companies are now looking for opportunities to locate outside of Metro Manila, mainly driven by cheaper labor costs.
“They would rather explore cities outside of Metro Manila because of lower labor costs. Most of the take-ups and expansion are coming out from Metro Manila,” Carbonell said.
She emphasized that a lot of companies who are seeking office spaces outside of Metro Manila are moving north because of the better labor pool Quezon City and areas beyond have to offer.
“Makati, BgC, still have the traditional cbd stamp. Alabang, not yet. QC has huge labor pool, the labor pool in the north is bigger,” Carbonell said.
As for the Bay Area, Carbonell noted that its proximity to the airport and seaports is attractive to locators.
Gotianun emphasized that the firm expects demand for its Alabang properties to grow in the future as the number of people residing in the southern part of Metro Manila continues to grow.
“In fact, the population is also a lot in the south. Many are moving south, and in terms of the population, many are young people, so you can expect more and more demand will be coming in from the south,” Gotianun-Yap explained.
“We’ve seen a very strong demand, that’s why you can see now our buildings are bigger, much higher because the demand has grown quite strong,” added the CEO.
Aside from the growing population in the South, another factor for increased demand in the Alabang area is the anticipated eight-kilometer North Luzon Expressway (NLEX)- South Luzon Expressway (SLEX) Connector road project, as it will be faster for North Luzon residents to access the area.
“Then you have to remember, once NLEX and SLEX are connected, it will be very fast to travel to Alabang from Quezon City. So the whole corridor will really change, just like what happened to the Skyway when we connected, and now with the NLEX and SLEX, that’s another major change that will impact the prices of Alabang,” Gotianun-Yap said.