Office Demand Remains Steady at the Start of 2024

The Metro Manila office market witnessed a slight uptick in rental rates, reaching PHP 861.3 this quarter compared to PHP 857.6 in the previous quarter. Forecasts suggest stability in rental prices throughout the year, albeit with potential variations in certain submarkets where competition remains tight due to high vacancy rates.

Vacancy rates are projected to increase in the short term with the influx of new office spaces expected in mid-2024. However, demand from various sectors such as the IT-BPM industry, is poised to offset this rise and reduce vacancies in the medium term, with an estimated year-end rate of 20.9%, despite the addition of 528,000 sq m of office space throughout the year.

Noteworthy transactions in the Metro Manila office market tallied up to 182,000 sq m in 1Q 2024. Leading the pack in transaction volume are key submarkets such as the Bay Area, BGC, and C5 Corridor. These areas enjoy strategic proximity and accessibility to residential hubs outside Metro Manila, such as Cavite for Bay Area and Rizal for C5 Corridor, facilitating talent acquisition for tenants.