Business World recognized KMC Savills as one of the
most reliable real estate consultancy firms in the country. This is
the excerpt from our interview:
The office property market was generally healthy
during the first six months of the year. "We had record new office
supply in the first half," said Fredrick Rara, research manager at
KMC Savills, Inc., a real estate services firm based in Bonifacio
Global City. "We thought we'd have double-digit vacancy rates at
the end of the first half."
of the second quarter of 2017, vacancies stood at 4.2%, the latest
KMC report noted. A total of 264,300 square meters (sq. m) of new
office space was completed during that quarter, a number
significantly higher than the 162,200 sq. m recorded in the first
quarter of 2017.
Strong occupier demand helped prevent the vacancies from
ballooning. KMC said in its report that the performance of the
market went beyond what it had initially estimated for 2017 because
of strong leasing activity in the major submarkets it covers.
"We're surprised, but we're happy that the market is still
sustaining the take-up," said Michael McCullough, managing director
of KMC Savills.
firm observed a slowdown in rental growth during the second quarter
in a number of submarkets, a sign that there was supply pressure.
"Keeping rents affordable during this massive inflow of completions
should sustain the take-up velocity in Metro Manila. We believe a
critical factor on the first half's impressive performance is due
to landlords' willingness to negotiate rents in order to stay
competitive," it said.
From a landlord's point of view, the trend might
not exactly be a cause for relief. "It may hurt the landlord in the
short term, but if you fill that building as quickly as possible,
still the better for them in the long run," Mr. Rara said. "That's
maybe why there's an acceleration of the take-up."
his part, Mr. McCullough said: "Some of the landlords have been
quick to adapt to the changing dynamics in the office market. And
so, for the right company, for the right brand, for the high-growth
companies, they're willing to give highly attractive offers."
Looking ahead, KMC sees a healthy occupier demand from expanding
outsourcing and offshoring market, which is also anticipated to
absorb the building completions in the coming quarters.
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