No slowdown in office space take-up this year

Demand for office space in Metro Manila is expected to continue and add as much as 1.2 million square meters in office space this year, a top property consultant said.

David Leechiu, CEO of real estate services firm Leechiu Property Consultants, said as early as January this year, over 415,000 sqm were already pre-committed, marking “the largest pre-commitment activity in history.”

He added that rents are at an alltime high in Metro Manila’s business districts, which indicate a rebound in the IT-BPM industry as well as the steady growth of the gaming segment.

Last year, Metro Manila’s total office take-up was at a record high of 775,000 sqm or 23 percent more than the take-up for 2016, Leechiu said.

Of the total demand last year, the IT-BPM industry, including shared services, took up 46 percent while gaming accounted for 30 percent.

But while demand for office space will likely continue this year, Leechiu said 20 percent of that is likely to be delayed.

A number of developments including the accreditation of more new Metro Manila office buildings by the Philippine Economic Zone Authority (PEZA) toward the end of 2017 boosted the office sector.

For this year, Leechiu said the demand from the IT-BPM industry is expected to bounce back after registering a 26 percent drop in take-up from 2016 to 2017.

He said 2018 would see demand from the IT-BPM sector bounce back to the 2016 level of 485,000 sqm.

An LPC Metro Manila Absorption Study covering 2018 up to 2020 forecasts industry demand to remain at the 485,000 sqm level up to 2020 while the offshore/online gaming industry, which registered demand of 234,000 sqm in 2017, is expected to grow further by 15 percent annually up to 2020.

“BPM players already invested in the Philippines will continue to dominate the Metro Manila office sector,” said Leechiu, whose firm enjoys a strategic partnership with CBRE, the world’s largest real estate services firm.