OFFICE take-up in Metro Manila reached a record high of 775,000 square meters (sq m) last year, or 23 percent more than the take-up in 2016.
David Leechiu, CEO of real-estate services firm Leechiu Property Consultants, said the business-process outsourcing industry, including shared services, took up 46 percent of last year’s demand, while gaming accounted for 30 percent.
Leechiu said he expects growth in the Metro Manila office sector to continue in 2018, with as much as 1.2 million sq m of office space expected to be added to the current inventory.
“But 20 percent of that is likely to be delayed,” he said. “As early as January this year, 415,000 sq m was pre-committed; the largest pre-commitment activity in history.”
Rents are at an all-time high in Metro Manila’s business districts, indicating the rebound of the information technology-business process management (IT-BPM) industry in addition to the growth of the gaming segment.
A number of developments, including the accreditation of more new Metro Manila office buildings by the Philippine Economic Zone Authority toward the end of 2017, boosted the office sector.
He expects the BPM industry demand, which registered a drop by 26 percent in take-up from 2016 to 2017, to bounce back in 2018 to 485,000 sq m, or the same level the industry achieved in 2016.
In its Metro Manila Absorption Study covering 2018 up to 2020, Leechiu Property Consultants projects industry demand to remain at the 485,000 sq m level up to 2020, while the offshore/online gaming sector, which registered demand of 234,000 sq m in 2017, is expected to grow further by 15 percent per year up to 2020.
“BPM players already invested in the Philippines will continue to dominate the Metro Manila office sector,” Leechiu said. “In the meantime, they are also expanding to provincial locations, such as Clark in Pampanga, Cavite, Batangas, Laguna and notably, Cebu City.”
Leechiu added that office supply in Cebu will increase by 47 percent, or by an additional 451,000 sq m, within the next six years, with 67 percent of new supply concentrated in the Cebu IT Park.
Image credits: Nonie Reyes