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Top reporters from the most reputable media outlets in the country gathered in KMC Savills' recently concluded media roundtable event held last August 24, 2016 in Makati Shangri-La Hotel.
The event featured the latest Office Briefing 2Q 2016 released by KMC Savills' Research and Consultancy team, led by Antton Nordberg.
Antton Nordberg kicked off the event by providing an overview of how Brexit affects the Philippine economy.
"Brexit has not caused any significant impact on the Philippines thus far, as the country's direct exposure to the UK remains minimal. However, we believe Brexit will open opportunities particularly in the Philippine real estate sector."
Nordberg also discussed the potential of Duterte's 8-point economic agenda.
He emphasized the importance of relaxing foreign ownership restrictions as it is something that KMC Savills has been waiting for from the previous administrations. "Raising the cap on foreign ownership will complement this and will further open the economy up to strategic industries, while also making current investors keen on expanding their foothold in the country."
Afterwards, Yves Luethi discussed current trends and forecasts on the PH office market.
"Office remains as the most active asset class and the occupier market is performing extremely well. We have been seeing a large number of expansions across all sectors - BPO and traditional offices, as well as local and foreign firms alike. Furthermore, we have been experiencing office take up from new market entrants, comprised of foreign MNEs and SMEs. Australia has particularly become a hot market for SME outsourcing activities to the Philippines."
"Metro Manila's office take up has been impressive for the first half of 2016 (Take up H1: 291,000 sq m), indicating a very positive momentum. In addition, the quarter has witnessed tightening vacancy rates reaching 2.9% from 3.7% compared to last quarter. These may increase in the short-term, with the targeted completion of 259,000 sq m of new office spaces by the end of the year."
Nordberg and Luethi also addressed questions from the media.
According to Nordberg, take up is seen to remain high for the rest of the year.
"I'm expecting maybe 500,000 plus (sqm) for the entire year, but we'll see. Next year will be a record year in terms of supply, so we are expecting a record year in terms of take up, and I'm pretty bullish that it can still be topped next year due to the occupiers' side."
Luethi added that pre-leasing also remains strong.
"A significant portion of upcoming office supply is being contracted ahead of turnover. For new supply coming on stream by 2017, about 20-30 percent in KMC Savills' pipeline would likely be leased ahead of building completion."
Nordberg said average yields for office property investors remained one of the highest in Southeast Asia.
"Average yields is currently at mid-7 percent, exceeded only by Vietnam's 9-10 percent. The local economy has benefited from the economic slowdown and increasing uncertainty in the global economy."
For more information, download KMC Savills' Office Briefing 2Q 2016. The full report is available here.