THE large amount of office stock expected to enter the Metro Manila market is expected to drive developers to build office developments outside of the nation’s capital, a real estate analyst said.
In an interview with The Manila Times, KMC Mag Group’s associate director for office leasing Rosario Carbonell said developers are still looking to expand their office portfolios as they plan to launch more office developments in areas outside of Metro Manila.
“If they will launch projects, it won’t be in Metro Manila. It will be in other cities,” Carbonell said.
Carbonell noted that this is becoming a trend among developers because a huge chunk of office stock is set to enter the market in the next two years.
Over 1.7 million square meters of new office space is expected to enter the Metro Manila office market between 2016 and 2018, according to KMC Mag Group.
Of these, Bonifacio Global City will be the most affected, as bulk of the supply — or an estimated 856,345 square meters of office space — is set come online in the next two years.
Carbonell noted that the trend of developers going outside of Metro Manila will also be beneficial to the national capital as it would help ease congestion in the metropolis.
“It’s a way to decongest Metro Manila also, in terms of traffic, and also to be able to tap untapped labor in certain areas. It’s actually an upcoming trend nowadays,” Carbonell said.
“Developers are slowly looking at neighboring cities outside of Metro Manila to develop. And not just neighboring cities, but also cities in Visayas and Mindanao,” she added.
Carbonell said the country’s office property market will still be a landlord’s market, but the large amount of supply that will enter the market will put a downward pressure on rates.
“It will still be a landlord’s market, but it will pressure developers to give better rates to tenants because of the upcoming bulk of supply,” Carbonell said.
Asked whether she believes real estate companies will be launching more office developments in Metro Manila for this year, Carbonell said: “None for now. Whatever we have on record will be more or less the buildings that will be built until 2018, for Metro Manila. More launches to come from other cities outside.”
KMC Mag Group is the local associate of the London-based real estate advisory firm Savills.