COworking, coliving and coretailing will continue to grow in the nation’s capital due to the various scenarios prevailing in the current environment, according to major integrated real-estate service provider.
In their recent study, Santos Knight Frank (SKF) said more than 1.1 million square meters (sq m) of new office space is expected come online in Metro Manila during the second half of 2019. It added, coliving in Manila has become an alternative flexible accommodation option especially among millennial workers. Co-living has become a viable solution for employees who need a place to stay with close proximity to work amid Manila’s transportation challenges. Among the primary players in the co-living space are SM’s MyTown and Ayala’s The Flats, which are set up either within CBDs or around the fringes of business hubs.
Flexible offices, defined as either coworking space or serviced offices, expanded over the last two years from both international and domestic brands. BGC alone has the biggest share at 33,800 sq m, while Makati has 19,600 sq m.
“Across Asia Pacific, the concept has thrived in Singapore, Beijing and Mumbai by providing a curated social environment that builds upon the community,” SKF said in a recent press briefing held in Makati City.
SKF said the coworking industry has been thriving in the Philippines as more Filipinos pursue entrepreneurial endeavors. Aside from entrepreneurs, companies that are looking for flexibility and enhancing their efficiency are turning to coworking to manage their real-estate costs.
“Manila continues to attract talent coming from provincial areas—an opportunity for coliving operators to capitalize on,” SKF said.
Infrastructure challenges and congestion are the other factors that have encouraged the growth of coliving. As business districts grow, SKF said employees are seeking secondary homes to save on time and cost in transportation amid heavy traffic congestion.
The coliving, coworking and coretailing sectors continue to grow in Manila, driven by rising rents and prices, technology, increased mobility, population growth and quality of life. Meanwhile, coliving has benefited from the growth of the office market in central business districts, primarily Bonifacio Global City and Makati.
This amounts to approximately 53,400 sq m and represents 70 percent of the market, according to Santos Knight Frank’s latest study that tracked the supply within Prime and Grade A office spaces as of the first half of 2019. Co-retail spaces have added in number along with the growth of malls in the city. SKF notes that the concept has expanded to the food sector, where upscale food halls have been introduced—an evolution of the traditional “food court” business. A new trend has also emerged where country-specific merchants are gathered into an area, such as the Filipino Village and K-town in Ayala Malls.
Meanwhile, SKF said the prime condominium market is enjoying a boom especially as more foreign buyers look into the Philippines for investment opportunities and with growth in the number of ultra-high net worth individuals (UHNWIs) locally.
According to Knight Frank’s The Wealth Report 2019, the number of UHNWIs in the Philippines will increase by 38 percent between 2018 and 2023—the world’s second-largest growth only after India. Over the last two years, selling prices of prime residential condominiums in Makati have increased by almost 25 percent, while in BGC, prices rose by 12 percent. Meanwhile, BGC experienced a higher growth in lease rates, rising more than 35 percent, compared to Makati’s 8-percent growth.