MANILA, Philippines - Demand for office space in Metro Manila will remain exceptionally strong, with tenants – particularly business process outsourcing (BPO) companies – aggressively taking up locations in key business districts to nearly full capacity, a property research firm said.
In a report, Pinnacle Real Estate Consulting Services Inc., a service provider for buyers, real estate lenders and investors, said developers are moving at an accelerated pace to be able to capture the demand.
It said with BPO firms on the frontline, building developers are expected to enjoy between 94-98 percent occupancy rates in their projects.
Pinnacle said pre-leasing has regained its popularity among incoming locators, with new buildings going up and developers racing to finish their respective projects.
“The limited space has opened the doors for developers and investors looking at old buildings that can be renovated or re-developed, to be re-introduced to the market,” the report said.
The Makati central business district (CBD) and Bonifacio Global City (BGC) remain the preferred office locations, although Ortigas Center, Taguig City and Quezon City are key alternative sites.
Makati CBD, in fact, is the first choice for major companies and global businesses seeking the ideal site for their headquarters. Most of the buildings are populated by BPOs and call centers with international operations and magnitude.
Meanwhile, the frantic pace to acquire lots in BGC has driven prices to surprisingly high levels, Pinnacle noted.
“This is actually good as both CBD and BGC stand to complement each within a reasonable distance, which makes the two attractive to foreign locators with integrated operations,” the Pinnacle report said.
It cited the peripheral areas of BGC as an emerging site, which could make them autonomous and self-sustaining. These include the five-hectare Forbestown Center, 50-hectare McKinley Hill, 15-hectare Uptown Bonifacio, and McKinley West, a 34.5-hectare mixed-use project near Manila Polo Club.
Overall, Pinnacle said the strong growth of the real estate sector across the country affirms its dominant role in the surging economy.
It has likewise stimulated allied occupations such as trading in construction materials, local development, tourism, housing, and the business sector in search of office, commercial and retail establishments.