After seven consecutive quarters of being stuck in the doldrums, the office market is showing signs of recovery, according to the latest report of Colliers Philippines.
In a recent webinar, Colliers senior director, office services-tenant representation Dom Fredrick Andaya pointed out that traditional and outsourcing companies are expected to be the biggest takers as they take advantage of the rental correction and availability of new office buildings in major business districts.
Moreover, Andaya also expects companies’ return-to-office mandates should boost office absorption over the next 12 months.
Colliers recorded about 146,100 sq meters (1.6 million sq feet) of office deals in Q1 2022, up from the 134,100 sq meters (1.4 million sq feet) in Q4 2021. Traditional and outsourcing firms dominated office space take-up during the period. Some of the notable transactions in Q1 2022 include Facebook, Lazad and ePerformax. These firms took up office space in Fort Bonifacio, Makati CBD and the Bay Area.
For tenants who are in a wait-and-see mode, Andaya urged them to consider occupying flexible workspaces. In a related development, Andaya said companies that have long-term occupancy plans should lock in spaces in new and sustainable office buildings and take advantage of rental corrections and other concessions given by landlords.
“The Philippine office market appears to be turning a corner with the stabilization of occupancy as we recorded a positive net take-up of 26k sq m after seven consecutive quarters of negative net absorption. The return-to-office and expansion plans of companies buoyed by improving pandemic situation and economic stimulus measures should accelerate take-up for the remainder of 2022,” Andaya said.
Andaya urged tenants to take advantage of rental corrections and prevailing market conditions. In a related development, landlords should continue offering flexible leasing schemes such as rent-free periods, delayed escalations, longer fit-out periods and tenant improvement allowance to attract and retain tenants.
Hybrid is the way to go
Colliers is also optimistic that traditional and outsourcing firms are likely to lead office absorption in 2022.
Nevertheless, a survey by the Information Technology and Business Process Association of the Philippines (IBPAP) showed that 80 percent of Filipino employees prefer WFH over working on-site. The survey also revealed that 90 percent of employees are more productive in a hybrid model.
Andaya said Colliers see a net take-up reaching 350,000 sq meters (3.8 million sq feet) in 2022 after a cumulative negative net-take up of -454,400 sq meters (-4.9 million sq feet) in 2020 and 2021.
Enabling a smooth transition to hybrid
In response to the call of the times, major systems technology integrator Radenta Technologies rolled out its Human Empowerment Equals Happy Employees (HEMP) and the popular Microsoft Office 365 Business Basic to make a seamless transition towards a hybrid work arrangement.
Randall Lozano, president of Radenta Technologies said the Microsoft Office 365 Business Basic is a communicating tool for all working on-site or remote as this facilitates online meetings and video conferencing for up to a total mix of internal and external 1,000 participants with features such as breakout rooms, attendance reports, spotlight and many more.
Lozano said its Employee Accounting protects company policies and employee files, tracks leaves and holidays and monitor staff expenses and reimbursements.
In terms of security, the Microsoft Office 365 Business Basic functions as a backup and protector of files. Lozano said the administrators manage the security policies to ensure the safety of information.
In a related development, Lozano said the HEMP has cloud data storage with encryption capabilities and automated back-up facilities to mitigate data loss due to accidental access and computer failures.
Image credits: Shutterstock