KMC Savills is pleased to present the
Briefing for 2Q 2017. The
report provides current data on rental rates, vacancies, and supply
pipeline in Metro Manila's central business districts and
submarkets for the quarter.
- A record 264,300 sq m of new
office space was completed in 2Q/2017, but the strong occupier
demand held vacancies to just 4.2% of total stock. The market's
performance has exceeded our initial estimates for 2017 as we saw
strong leasing activity in the major submarkets we cover.
- BGC accounted for more than half
of the new supply with 140,800 sq m, but the robust demand in the
submarket held the vacancy rate low at 3.8%. The Bay Area and
Alabang submarkets composed the rest of new supply during the
quarter and also retained single-digit vacancy rates.
- However, we have observed
declining rental growth in a number of submarkets indicating
significant supply pressures. 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 mitigate
rents in order to stay competitive. As such, we should see
sustained pressure on rentals until next year as we still expect
around 892,100 sq m of new office space in the next 12 months.
- We still see healthy occupier
demand from the expanding outsourcing and offshoring market, and we
expect it should be able to absorb the building completions in the
coming quarters. On the other hand, we should anticipate tempering
in rents to facilitate the quick absorption of new stock and keep
vacancies at a reasonable level.
here to read the full report »
Please contact Michael McCullough or Fred Rara for more information on this