KMC Savills is pleased
to present the
latest Office Briefing for 2Q 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.
- The overall vacancy rate in Metro Manila dropped to 3.0%
in 2Q/2018 from the previous quarter's 3.8%. Net absorption of
around 198,200 sq m outpaced the 164,300 sq m of new office
completions during the same quarter. Quezon City was able to
significantly reduce its vacancies to 8.0% of its current stock due
to the recovery of certain outliers in the submarket.
- As such, the tight market conditions have caused rental
growth to accelerate by 4.4% YoY during the quarter. Much of the
acceleration was observed in the Bay Area where it experienced
rental growth of 11.5% YoY during 2Q/2018. Alabang also had
above-average growth of 5.0% YoY as Philippine Offshore Gaming
Operator (POGO) tenants settle into the fledgling CBD.
- In the first half of 2018, as much as 294,300 sq m of GLA
was introduced in the market. So far, robust occupier demand has
been sustained and has kept vacancy rates low in most submarkets.
However, the second half of the year is expected to bring 581,900
sq m of new Grade A office space into the Metro Manila market.
Based on the historical trend of office completions, the incoming
new supply is still significantly challenging.
- The POGO sector has taken a foothold in certain
submarkets, such as Alabang and the Makati Fringe. However, the
offshore and outsourcing (O&O) market has been resilient in the
Bay Area despite the dominance of the POGO sector. With the
impressive performance of both sectors in 2Q/2018, we have revised
our 2018 year-end vacancy rate forecast downwards to
Click here to read the full report »