By Sheldeen Joy Talavera, Reporter
THE vacancy rate for Metro Manila office property rose by 21.9% in the third quarter (Q3) mainly driven by the completion of new office buildings, Colliers Philippines said.
About 167,000 square meters (sq.m.) of vacant spaces were recorded during the period, higher than the 137,000 sq.m. seen in the same period last year and 78,000 sq.m. in the previous quarter, Colliers Associate Director for Office Services Kevin Jara said during a briefing on Wednesday.
“Metro Manila recorded a marginal rise in office vacancy due to the completion of new office buildings and spike in vacated spaces,” Colliers said in its report.
Colliers said approximately 11.3 million sq.m. of office space were occupied as of September.
“We are now at 502,000 square meters of office space transactions in the first nine months of 2023. That’s marginally better than [493,000] that was done in the first nine months of 2022,” Mr. Jara said.
In the third quarter, traditional offices comprised the majority of office space deals at 98,000 sq.m., including government agencies, telcos, insurance firms, and flexible workspace operators, the property consultancy firm said. The figure has risen from 69,000 sq.m. previously.
The information technology and business process management (IT-BPM) sector recorded 70,000 sq.m. of transacted spaces, lower than the 93,000 sq.m. a year earlier.
Philippine offshore gaming operators (POGOs) reportedly transacted about 29,000 sq.m., which was higher than the 7,000 sq.m. last year, but lower than the 55,000 sq.m. transacted in the second quarter.
“Net demand in this quarter is still positive. However, we did see a slowdown, if you look at quarter-on-quarter figures for net demand, due to some surrendering of leases in non-renewals from some POGOs and BPOs in the quarter,” Mr. Jara said.
During the third quarter, the demand rose by 10.78% to 185,000 sq.m. of office spaces from 167,000 sq.m. in the third quarter last year and 170,000 sq.m. in the second quarter of 2023.
Mr. Jara said that Colliers’ year-end demand forecast of 220,000 sq.m. is still on track.
A total of 202,000 sq.m. of new office space was delivered during the third quarter, contributing to the total office stock of about 14 million sq.m. in Metro Manila.
“We are still expecting significant supply to come online in the remainder of 2023 with the completion of buildings like Megaworld’s International Finance Center in Uptown,” he said.