KMC Savills and its international affiliate, Savills, has just
released its bi-annual
Asian Cities Report for Manila Office. The report, which covers
the first half of 2017, features key market updates on the local
Office Market Overview
The Manila office market has recorded impressive growth in the
past few years driven by the increasing demand for space from the
expanding O&O sector. The growing outsourcing operations in the
capital led to net take-up outpacing new supply in 2016 which
pushed vacancy rate down to 2% by the end of the year.
The construction delays in 2016 have led to a noticeable rise in
the anticipated new supply in the 2017 pipeline. BGC will account
for close to half of all new additions this year with 461,400 sq m
while the Bay Area will come in second with 206,700 sq m. Although
new supply for 2017 in these submarkets is relatively large
compared to previous periods, we have still witnessed high levels
of leasing activity. Furthermore, a number of buildings in both
districts have already been partially preleased and there are
encouraging signs that the robust occupier demand is intact.
Investment market and Forecast
In the asset market, investment activity was not as busy
compared to 2015 due to the lack of big ticket acquisitions.
Additionally, the landscape was dominated by several land deals
with just two offi ce transactions recorded during 2016.
The robust economic story of the Philippines is expected to
continue this year with GDP estimates still within 6% to 7%.
However, there are risks of downgrades from credit agencies which
have already raised worries of the unpredictability of the current
government's policies. In addition, the forecast budget deficit may
further add to this likelihood despite the added government
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