FILIPINO real-estate services firm Pronove Tai International Property Consultants (PTIPC) sees a slowdown in the absorption of office space in Metro Manila this year given a small number of buildings certified by the Philippine Economic Zone Authority (Peza).
PTIPC CEO Monique Pronove said that out of 45 new buildings expected to be completed this year, only eight are Peza-accredited.
“There were only six IT [information technology] centers and parks proclaimed in 2018, a measly number compared to 2017’s 26,” she said. “We hope the proclamations will be sped up this year.” All the buildings in the pipeline—inventory-wise—have a total of 1.04 million square meters (sq m) of office space.
A quarter or 264,000 sq m has already been pre-leased as of December 2018.
Philippine Offshore Gaming Operators (Pogo) cornered a lion’s share of 45 percent of pre-rented space.
IT-business process management follows at 36 percent. Traditional offices got 19 percent of the supply.
“While we are positive on 2019, we encourage our clients to diversify their tenancy mix and consider competitive pricing, especially in districts with high vacancy,” Pronove said. Last year, 32 new buildings completed, marking an overall unhealthy vacancy level of 4 percent in the metropolis. A robust vacancy level is at 5 percent to 7 percent.
Muntinlupa City recorded a 3-percent vacancy level, with Makati City and Ortigas Center both at 1 percent.
The Bay Area, however, booked the tightest vacancy at 0.4 percent on the back of strong Pogo take-up.
Meanwhile, Quezon City and Mandaluyong City continued to see the biggest number of space for rent at 13 percent and 10 percent, respectively. “We would like to draw attention to Quezon City, which ended 2018 with the highest vacancy,” Pronove said.
“In 2019, Quezon City is slated to deliver the highest supply of 343,000 sq m of new office buildings developed largely by SM, Ayala, Eton and the Araneta Group. As such, we see rents and capital values in the district to be pressured,” she added.
Established in 2002 by principals with a combined 40 years of experience in the Philippine and Asian real-estate industry, PTIPC has been providing its expertise and quality services that include research and consultancy, landlord and tenant representation, property sales and purchasing and property portfolio management for the past 15 years.
Throughout this time, it has catered to the real-estate needs of government agencies, diplomatic missions, multinational, foreign and local organizations.
To date, the company has had P13 billion worth of transactions in various market segments, such as office, retail, industrial and petrol with over 1.2 million sq m of rentable space transacted.