KMC Savills is pleased to present the latest
Office Briefing for 4Q 2016. The report provides current data
on rental rates, vacancies, and supply pipeline in Metro Manila's
central business districts and submarkets for the quarter.
In 2016, new supply in Metro Manila was lower than expected.
Only 311,700 sq m of new office supply was completed due to several
building completions pushed back to later quarters. In 4Q/2016, the
capital recorded no new supply from its central business
Although net absorption was lower at 345,800 sq m in 2016 in
contrast to the 443,300 sq m set in 2015, it still exceeded new
deliveries - indicating supply-side bottlenecks rather than lack of
demand. As a result, vacancies continued to decline in all
submarkets and resulted to a lower vacancy rate for Metro Manila of
2.0% by the end of 2016.
Rents in Metro Manila CBDs continued to stabilize in 4Q/2016
after growing 3.5% YoY. However, risks on rental growth still
remain as the expected supply in the coming quarters, which
increases occupiers' bargaining power, will weigh heavily on
Construction delays have expanded Metro Manila's pipeline in
2017 and 2018, which is almost a million sq m each year during this
period. In 1Q/2017, as much as 461,800 sq m of new supply will be
added because of the delayed building completions initially
targeted for 2016.
In the coming quarters, we do not discount the possibility that
a number of completions will be moved to later quarters, which
should ease our expectations on higher vacancies in 2017. However,
we still expect the office market this year to be favorable for
tenants, particularly those who start the negotiations early and
Click here to read the full report »
Please contact Antton
Nordberg or Michael
McCullough for more information on this report.