KMC Savills is pleased to present the latest
Office Briefing for 3Q 2017. The report provides current data
on rental rates, vacancies, and supply pipeline in Metro Manila's
central business districts and submarkets for the previous
- New supply declined to 170,400 sq m in 3Q/2017, but net
absorption kept its pace with 147,600 sq m. The overall vacancy
rate marginally rose to 4.5% during the quarter from 4.2% in
2Q/2017. Market conditions remained tight in most submarkets with
the exception of Quezon City.
- The Bay Area accounted for more than a third of the new supply
followed by BGC and Quezon City. However, leasing activity during
the quarter has mostly concentrated in the Bay Area with net
absorption closely tracking new stock. This is mainly due to a more
diversified collection of occupiers, such as the emerging offshore
gaming segment and certain sectors of government.
- Rents have regained footing in 3Q/2017 as vacancies remained
tight amid minimal additions to stock. To date, market performance
is still ahead of our forecast, and we expect the office market to
end the year with manageable vacancies. However, we are still of
the view that landlords should become more accommodative in the
coming months with the massive influx of supply until 2020.
- Lastly, the delays in granting PEZA certification for certain
office buildings have become concerning. We have observed slower
leasing activity in buildings without PEZA certification, and we
expect the delays to affect future market performance. Again, we
may expect landlords to be more flexible in accommodating the
sensitive needs of expanding occupiers, but this may only slow the
rise of vacancies if the delays persist.
Click here to read the full report »
Please contact Michael McCullough or Fred Rara for more
information on this report.