STRONG pre-leasing demand for Metro Manila office spaces will continue to absorb the supply being completed over the next few quarters, a real estate consultancy firm said in a report.
Real estate consultancy and research firm Cushman and Wakefield expressed its optimistic outlook for the long-term potential growth of the Manila office market, citing continuing demand from the Business Process Outsourcing (BPO) sector as the key factor in the absorption of new market supply.
“Preleasing demand, driven by the BPO industry and new corporate occupiers, continues to absorb space from upcoming building completions,” Cushman and Wakefield said.
Cushman and Wakefield noted that an estimated 99,534 square meters of office space was taken up in the second quarter of 2016, slightly higher than the 97,000 square meters absorbed in the same quarter last year.
“The supply of Prime and Grade A office space in Metro Manila increased to almost 5.0 million square meters in the second quarter of 2016 from 4.9 million square meters in the previous quarter of this year,” Cushman and Wakefield said.
Despite the higher amount of supply in the market, the real estate consultancy firm noted that vacancy rates during the period declined, driven by strong pre-leasing activity from BPO firms.
“Demand continues to be boosted by business process outsourcing (BPO) firms,” the report said.
Average vacancy rate during the period fell to 1.6 percent from the 3.7 percent vacancy rate posted in the same quarter last year.
Cushman and Wakefield noted that BPO firms took up much of the office space completed in the period.