THE Philippine office property market was among the fastest growing markets in the Asia Pacific region in the second quarter this year in terms of rental rates due to continuing demand from the offshoring and outsourcing industries.
Real estate services firm Jones Lang Lasalle said in a report that rental rates in Manila rose 3.4 percent in the second quarter from the first, next only to Bengaluru in India which registered a growth of 4.8 percent.
Rental rates in Manila during the second quarter averaged at P946 per square meter “as demand continued to outpace new construction supply,” JLL said.
Year-on-year, rental rates in the country’s capital were up 5.9 percent in the second quarter.
JLL projects rental rate growth to continue in the coming quarters.
“Rents are expected to continue to increase in the next two years as landlords capitalise on strong office demand. However, the large incoming office supply may temper growth,” JLL said.
In aggregate, JLL said rents in the Asia Pacific region grew by 5.9 percent, the same pace as in the previous quarter.
Declines were seen in some markets, with Perth observing the biggest decline of 4.7 percent, followed by Delhi with a 3.7 percent decline, as well as Jakarta and Singapore where rental rates dropped 2.8 percent and 3.3 percent, respectively.
On a yearly basis, Asia Pacific rents grew by 2.9 percent in the second quarter compared to the same quarter last year.
“Sydney outperformed the region with annual net effective rent growth of 17.1 percent followed by Hong Kong (+11.1percent) and Bengaluru (+10.5 percent),” the report said.
This was followed by Osaka with a 9.5 percent growth and Shanghai with 7.8 percent on the back of strong demand for office spaces.
Meanwhile, it said Asia Pacific gross leasing activity in the second quarter declined by 16 percent year-on-year due to “the delayed impact of stock market volatility in early 2016 and uncertainty caused by slowing economic growth in China.”