‘Demand for office space remains robust’

DEMAND for office space is still strong amid the health crisis and the change of government, Leechiu Property Consultants (LPC) said on Wednesday.

“The office market remains to be resilient,” LPC director for Commercial Leasing Mikko Barranda told reporters during their webinar, where they revealed the results of their June 2022 report. It indicated that rental deals have reached 379,000 square meters in the first half, or already 70 percent of the overall takeup in 2021.

“We are happy to announce that we’ve concluded 255,000 square meters [sq. m.] of transaction in the second quarter of 2022 alone, which is a 106-percent [hike] compared to last quarter. This is also the largest volume of transactions we’ve seen since the start of Covid-19 in March of 2020,” he said.

Per the study, information technology-business process management (IT-BPM) companies accounted for 107,000 sq m or 43 percent of the office space demand from April to June 2022, with majority of the deals in Metro Manila.

The Philippine Offshore Gaming Operators (Pogos) took up 21,000 sq. m. or 9 percent, the first sign of leasing activity from this industry since the pandemic began, as 126,000 sq. m. or 48 percent were taken by the other tenants.

“This can best be interpreted as tentative steps for now,” the top executive said. “All the leasing activity in the past three months—from many new captives and companies doing business here for the first time—tell us outsourcing to the Philippines continues to be a reliable solution for companies in the West fighting impending global recession.”

On the supply side, Metro Manila as a whole currently has 14.22 million sq. m. of office inventory, of which 11.64 million sq. m. (82 percent) are occupied by tenants while 2.57 million sq. m. (18 percent) are vacant.