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Colliers Quarterly | Property Market Report – Office | Q3 2021 | Philippines

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BPOs and traditional corporate occupiers will continue to drive office demand in Metro Manila. Net absorption is projected to remain negative in 2021 before deals pick up in 2022. Over the next 12 months, improvement in vaccination rates, relaxation of mobility restrictions, and rise in business confidence should buoy office space absorption. Availability of options in prime locations and attractive rents should enable tenants to move major business districts.

 

Colliers’ Q3 2021 Property Market Report shows that outsourcing and traditional corporate occupiers (companies in various sectors, such as legal, engineering and construction, government agencies, and flexible workspace operators) continue to drive office demand in Metro Manila. However, net absorption is projected to remain negative in 2021 before deals pick up in 2022. New supply in Q3 2021 reached 156,600 square meters (1.7 million square feet), up 102% YOY. Q4 2021 new supply will be in the Bay Area, Alabang, Makati CBD, and its fringes.

Over the next 12 months, the improvement in vaccination rates, relaxation of mobility restrictions, and rise in business confidence should buoy office space absorption. The availability of options in prime locations and attractive rents should enable tenants to move from non-core to core locations including major business districts.

Tenants are urged to take this opportunity to prepare for a return to the office, while renovating and assessing the optimal level of split operations. Colliers believes that now is an opportune time for occupiers to lock in leases in central business districts (CBDs) such as Makati CBD and Fort Bonifacio. The narrowing rental gap between CBD and non-CBD locations due to rental correction allows occupiers to implement flight-to-quality measures. On the other hand, landlords should highlight value-added features and emphasize wellness and green building certifications

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Colliers Quarterly | Property Market Report – Office | Q3 2021 | Philippines

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Joey Bondoc

Associate Director

Research

Manila

Prior to joining Colliers in March 2016, Joey worked as a Research Manager for a research and consutancy firm where he handled business, political, and macroeconomic analysis. He took part in a number of consultancy projects with multilateral agencies and provided research support and policy recommendations to key government officials and top executives of MNCs in the Philippines.

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