Demand for office space seen rising

MANILA, Philippines - Despite the nearly unchanged office space take-up seen in the first semester compared to a year ago, the office market is seen to post growth this year until 2016 due to strong demand particularly from the business process outsourcing (BPO) sector, real estate services firm Jones Lang LaSalle (JLL) said.

Sheila Lobien, JLL head of project leasing markets said in a briefing Wednesday that for the January to June period, office take-up reached 168,000 square meters (sqm), up 1.2 percent from the 166,000 sqm in the same period last year.

But while the office space take-up was almost the same in the first half from last year, she said the firm is upbeat the office market would grow given increasing demand.

“We are very confident in the office market. Many are thinking of expansion. We think this will continue from now until 2016 and even beyond,” she said.

Lobien said that of the 168,000 sqm take-up seen in the first-half, 81,700 sqm were pre-commitments or transactions which involve firms closing deals for the property even if it is still under construction.

“This (pre-commitments) is growing. This shows the confidence is there and the BPO sector is driving the demand,” she said.

For the first-half alone, the BPO sector accounted for the bulk or more than 50,000 sqm of the office space take-up.

In terms of location, Lobien said Bonifacio Global City (BGC) in Taguig City continues to attract office space locators primarily due to accessibility and high quality of development.

“BGC is a favorite because it is near Makati and there are Grade A offices built here suitable for BPOs,” she said.

Apart from BGC, McKinley Hill in Taguig and Quezon City are also among the top picks of BPO locators.

“Quezon City is a favorite spot because of the labor pool,” Lobien said.

For the first half of the year, she said BPO firms were also seen to be looking for office spaces in areas outside of Metro Manila such as Antipolo in Rizal, Clark in Pampanga, Cavite, Cebu and Davao.

“We are not seeing a bubble in office real estate because supply is being taken up,” she added.

For the residential property sector, JLL associate director Antonio Sabarre said demand is seen to continue to come from overseas Filipino workers as well as BPO employees.

From this year until 2018, he said an estimated 149,920 units are in the pipeline, with the bulk or 96 percent categorized as mid-end developments or those being sold at P1.5 million to P10 million.

Most of the residential condominiums being developed are in Quezon City.

“There is big percentage in Quezon City. It can build more towers because there are more land there,” Sabarre said.