THE real-estate industry is gearing up for the integration of economies of the 10 member-states of the Association of Southeast Asian Nations (Asean), which will take place later this year, said the top official of a property consulting firm.
Rick Santos, founder, chairman and CEO of CBRE Philippines, said the opening of trade will open various opportunities to all segments of the real-estate market, particularly in the office sector.
“Manila looks to be well-positioned for Asean head offices,” he said, while citing to the BusinessMirror the various factors that make the Philippines the preferred destination of locators in the region.
One of the country’s comparative advantages seen to continue to attract investors to put up offices here is the youthful and English-speaking population, the top executive noted.
He added that good customer-service skills and the cost-competitiveness of the country will shore up investments.
“What’s more, vacancy rates will inch down, as more foreign firms set up shop to capitalize on the country’s strengths,” he said.
Within the region, the Philippines offers the most affordable office rents, with prevailing lease rates in Makati City costing around $29 per square foot annually.
Thailand comes next, at $31 per sq ft yearly.
“The Makati CBD [Central Business District] is still highly attractive to global firms; Fort Bonifacio is the next preferred location,” Santos said.
“Brisk expansion among multinationals and BPO [business-process outsourcing] bolsters demand for office space,” he explained.
Based on the December 2014 Market Insight report of Pinnacle Real Estate Consulting Services Inc., lease rates of Premium Grade A offices in Makati have stayed lower than the monthly P1,200-per-square-meter mark.
They have a weighted average of around P800 per sq m compared to those in Bonifacio Global City (BGC), at over P800 per sq m.
Vacancy-wise, high-quality Grade A office buildings located within Makati are “practically fully leased out,” while those in BGC have a weighted vacancy of 3 percent.
“Makati rents are seen to strengthen up to 2017 due to lack of new completion of Grade A buildings, as vacancy levels are seen to remain below 3 percent,” Santos said.
With this trend in sight, he suggested that Grade B buildings and retrofits could help answer the expansion demands of headquarter offices in CBDs.