Makati has always been the top-of-mind central business district; however, in the past few years, demand for space in the area has been truly massive that vacancies have become limited. Makati is almost out of developable areas and buildings, forcing locators to look for an alternative CBD.
And this is where Bonifacio Global City (BGC) came in. Located along the border of Makati and Taguig, the CBD has quickly emerged as the alternative to Makati, offering newer, higher grade supply that caters to the requirements of both BPOs and multinational firms. BGC is currently home to some of the largest companies in the world, including Coca-Cola, Australian insurer QBE, JP Morgan Chase, and tech firm Google.
Currently, BGC has the highest number of new supply and developments in the pipeline; despite this, demand for space in the city has not slowed down. In the first quarter of 2016, BGC stock increased by 29,000 sq m, breaching the 1-Million sq m mark. Even with this new supply, BGC's vacancy rate declined to 3.8% from 5.7% in the 4Q /2015, backed by the strong demand from notable locators such as Baker & McKenzie Global Services Manila and Uber.
Rental rates continued to grow albeit at a milder pace as the YoY and QoQ growth rates posted during the quarter were the slowest since 2011. The average rental rate in BGC picked up to Php 878.0 per sqm/month in 1Q/2016, a 3.3% increase YoY and a 0.5% increase QoQ.
With over 300,000 sq m of new office spaces programmed to be delivered in the next three quarters, vacancy is anticipated to reach the double-digit territory at the end of 2016. As a result of supply-side factors, rental rate growth in BGC is likely to ease for the rest of the year.
Upcoming Developments this 2016:
|Development:||World Plaza||Uptown Place Tower 3||Inoza Tower|
|Building Grade:||Class A||Class A||Class A|
|GLA:||32,753 sq m||42,256.80 sq m||11,919.55 sq m|
|GFA:||Not Available||43,091 sq m||26,000 sq m|
|Completion Date:||4Q 2016||2Q 2016||4Q 2016|