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MAJOR HIGHLIGHTS: KMC Savills meets media for Metro Manila Office Briefing 2Q 2017
KMC Savills reconnects with several members of the press for a round table discussion on the recently launched Metro Manila Office Briefing for 2Q 2017. After the surprising but exceedingly good performance of the office market, KMC Savills shares their expertise on the factors at work and impact it brought to the office market.
KMC Savills Research and Consultancy Manager, Joshua De Las Alas, started off with economic updates. Looking at the macroeconomics overview, the Philippines' positive GDP growth produced higher growth prospects. According to Joshua, while we are only second to India now, the Philippines have already overtaken China and Vietnam.
Joshua also gave the press a briefer on the current monetary policy and rebound on foreign investments. However, he noted that the country dropped 10 notches in the global competitiveness report. This can be remedied with growing infrastructure that can raise public spending and positive improvement of government institutions in the country.
Despite all of this, KMC Savills Research assured that "the real estate market is healthy". There is nothing to worry about especially in the office market. Joshua reported that Bonifacio Global City remains to be the largest submarket and should be credited for its good performance. They are also looking at Alabang and Quezon City as significant office submarkets. With the 800,000-office space completion in the next 12 months, he is confident that Metro Manila will remain affordable.
KMC Savills Managing Director Michael McCullough also appeared before the media to deliver the outlook on the office market. The BPO sector continues to expand and is expected to grow in the next 5-6 years along with other higher added value services firms in finance and healthcare. The online gaming and call center industries continue to be the top occupants of Grade A offices.
The outlook states that the rent rate will also continue to "taper off". As the supply grows, McCullough made it very clear that "landlords have to be creative and tenants will have a say". In addition, LEED certified buildings are all the rage in Grade A offices because of its good quality, efficient lighting and air conditioning. He specifically mentioned ArthaLand Century Pacific Tower in BGC as an example of a LEED pre-certified platinum building.
Overall, Michael McCullough informed the media that this is an exciting time for the real estate market. It was emphasized that the growing vacancies will be manageable and that rents will continue to be affordable. Despite the market worries, he stated that the "Philippines is in a lucky spot" as the "economy is very strong, one of the best in Asia".
Read full report here.