The bulk of available Metro Manila office space is projected to spread to the Alabang and Bay Area property markets after 2018, as most of the upcoming supply will come online in the next two years.
In a press briefing on Wednesday, Leechiu Property Consultants(LPC) chief executive officer David Leechiu told reporters that by 2018, most of the business districts in Metro Manila will be fully developed.
“There will be very little land left for new buildings to be put up. Therefore, the demand will shift from being spread throughout Metro Manila to just a handful of business districts,” he said.
The supply of Metro Manila office space from the 1960s to September 2016 is 8.6 million square meters. An additional 4.2 million square meters of office space is now in the pipeline, Leechiu disclosed.
He added that while Bonifacio Global CIty(BGC) will still be the prime business district in the Philippines due to the amount of office developments in the location, the Bay Area will be the next important city as land will still be very abundant there after 2018.
BGC accounts for majority of the upcoming office supply in 2018, estimated at around 441,000 square meters. However, after 2018, Leechiu noted that with BGC being fully developed, the demand for office spaces will move South, particularly in the Bay area and Alabang.
“In core Metro Manila, land has been exhausted, the tenants will have no choice but to go to Filinvest and the Bay. That’s why we think the Bay Area and Alabang will have dramatic changes in the next six, seven, eight years,” Leechiu said.
Meanwhile, he cited data from the the IT and Business Process Association of the Philipppines(IBPAP), which noted that the 1.3 million Full Time Employees(FTEs) working for BPO companies is seen to double to 2.6 million in the next six years.
“We are building just enough office space in the next six years,”Leechiu said.
LPC noted that for the first nine months of 2016, a total of 600,000 square meters of office space has already been taken up, 63 percent of which were leased by BPO companies.
In contrast, a total of 577,000 square meters of office space was absorbed by the market for the entire 2015 with BPO companies accounting for 66 percent of the leased spaces.
Leechiu noted that net take up for office spaces has consistently grown in the last 15 years straight, with the 600,000 square meter take up for the first nine months alone of 2016 hitting a new record.
“And we think this is going to hit 720,000 to 750,000 square meters by year-end. This is about 40-45 percent jump from last year’s record,” Leechiu said.
Furthermore, Leechiu noted that already 80 percent of the total 721,000 square meters of Metro Manila office space for 2016 has already been taken up.
Finally, LPC disclosed that at present, 361,000 square meters of office space for 2017 has already been committed for lease.