Fresh opportunities arise in Metro Manila's office landscape

Metro Manila's office landscape is set for an exciting transformation, with the arrival of new office buildings and a shift in tenant dynamics. According to property consultancy firm Colliers Philippines, the evolving market is poised to offer fresh opportunities, with the office vacancy rate anticipated to reach 20.5 percent by December 2024.

Colliers’ director for office services, Kevin Jara, highlights that the vacancy increase will be a result of a combination of new spaces entering the market and the exit of Philippine offshore gaming operators (POGOs). While the office space vacancy rose slightly from 18.3 percent in the second quarter of 2024 to 18.6 percent in the third quarter, this change reflects a dynamic market adjusting to new conditions.

As POGOs transition out, an estimated 157,000 square meters (sq m) of office space will become available by the end of 2024. This shift opens doors for new businesses and tenants seeking prime locations. In fact, the market saw around 57,000 sq m of office space vacated in the third quarter, paving the way for fresh opportunities for other sectors.

Excitingly, Colliers also projects the addition of 119,000 sq m of new office space by year-end 2024, with a further 615,000 sq m expected in 2025, particularly in thriving areas like Cubao, North Edsa, and the Bay Area. This influx of new properties signifies a robust development pipeline that caters to the evolving needs of diverse businesses.

While average office rents are expected to remain stable by year-end, landlords are adapting lease conditions to align with market demands. Areas like Makati, Fort Bonifacio, and Ortigas, known for their lower vacancy rates, are anticipated to see slight increases in rental prices, showcasing their enduring appeal.

Transaction volumes are also on the rise, driven by a strong demand from the information technology and business process management sectors, as well as traditional office users. This momentum reflects a resilient market that continues to attract a variety of tenants.

Colliers remains optimistic about the future of Metro Manila's office market, anticipating stability and growth linked to factors such as the upcoming US elections and promising legislative initiatives like the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act. This proactive approach positions the market for success in the evolving landscape ahead.