KMC Savills is pleased to present the
latest Office Briefing for 4Q 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.
- Metro Manila saw 746,900 sq m of new Grade A office completions
in 2018 - roughly the same amount recorded in 2017. Net absorption
was significantly higher last year at 701,100 sq m compared to
615,200 sq m recorded in 2017. As such, overall vacancies were kept
at just 4.8% of stock and is slightly higher than the 4.5% vacancy
rate the previous year.
- Rents in the capital have accelerated further, hitting 5.0% YoY
in 4Q/2018. The tight conditions coupled with contract expirations
have propped higher bids in Makati CBD while subsequently pushing
up rents in the premier district. In addition, rents in BGC are
still on the uptrend as the strong outsourcing and offshoring
(O&O) demand raised rentals further during the quarter.
- Quezon City received more than half of new supply in 4Q/2018
which raised its vacancy rate to a ten-year high of 16.4% as
occupier demand remained sluggish. This has dragged Metro Manila's
performance during the quarter and may pull the office market
further in the coming quarters. It has been a key outlier since
2016, failing to follow other submarkets such as the Bay Area and
Alabang which have reversed its course since then.
- In the coming quarters, our eyes are on Ortigas Center which is
expected to see 206,000 sq m of new Grade A office stock. We
anticipate that occupier demand in the CBD will struggle with the
influx of office supply as it will consequently raise total
vacancies. However, we also forecast a significant acceleration in
rents in Ortigas Center as new supply improves the quality of its
here to read the full report »