KMC Savills is pleased to
latest Metro Manila Office Briefing for 1Q
2018. The report provides current data on rental
rates, vacancies, and supply pipeline in Metro Manila's central
business districts and submarkets for the previous quarter.
- In 1Q/2018, around 130,100 sq m of
Grade A office space was added in Metro Manila, predominantly in
BGC, the Bay Area and Quezon City. Net absorption was able to
exceed new supply and it resulted in a lower vacancy rate of 3.8%.
All submarkets experienced declining vacancies except for Quezon
City, which increased to 10.4% of its office stock.
- Average rents in Metro Manila
continues to expand and registered growth of 3.4% YoY - buoyed by
the tightening conditions in most submarkets. However, the Bay Area
remains to be a key outlier as average rents grew by 6.5% YoY. The
tight conditions in Alabang also have accelerated rental growth to
3.8% YoY from 3.0% YoY in 4Q/2017.
- The estimated 723,200 sq m of GLA
in the coming quarters of 2018 should increase the vacancy rate
beyond the 5.0% mark by the end of the year. However, we believe
this amount is still manageable given the market's current
performance. In addition, rental growth may not be as affected due
to a changing occupier mix in select submarkets such as Bay Area
- The offshoring and outsourcing
sector is still a significant occupier of office space. However,
the Philippine Offshore Gaming Operator (POGO) sector has been a
rising player, as of late. We believe the emergence of the POGO
sector has eased risks of a potential glut in the office market. As
such, we expect occupier demand to remain healthy even with another
record year of new office supply.
Click here to read the full report »
Please contact Fred Rara or Michael McCullough for more
information on this report.