PHL seen to add 543,300 sq.m. of office space yearly

JOSE LOSADA-UNSPLASH

THE Philippines can expect the completion of an average of 543,300 square meters (sq.m.) of office space in the next four years, a study on the property shows.

Real estate consulting firm Colliers in its report “Asia Pacific Market Snapshot” said that it sees office completion to return to the time before the entry of Philippine offshore gaming operators.

This year, Colliers projects the completion of 808,900 sq.m. of office spaces, which it anticipates to increase office vacancy to 18.2% by yearend.

In the third quarter, Colliers said that vacancy was steady at 17.7% due to the contribution of business process outsourcing and traditional firms.

It also recorded the delivery of 102,700 sq.m. of new office space in the third quarter, which was lower than the 146,700 sq.m. recorded in the second quarter and 156,600 sq.m. in the same period a year ago.

“Office space absorption for the remainder of 2022 should be supported by traditional and outsourcing firms,” Colliers said.

Meanwhile, it expects office rents to recover next year after forecasting these to bottom out by the end of 2022.

In the third quarter, Colliers saw a 0.4% increase in rental rates. It then projected an annual rent increase of 1.9% from 2022 to 2024.

On the residential side, Colliers said that improving consumer sentiment and sustained remittances from overseas Filipino workers would support the demand for residential units.

However, it also expects rising interest rates, compressing yields, and increasing prices of construction materials to hamper launches in the remaining months of the year.

Historical launches and take-up in the third quarter rose to 30,000 and 15,000, respectively, which already surpassed the 2021 full-year launches of 28,000 and take-up of 13,000.

According to Colliers, property investors are seeking value across all types of assets and for long-term use.

“We expect the recent growth trend in market inquiries to be sustained until yearend,” Colliers said. — Justine Irish D. Tabile