Manila top office market in AsPac

MANILA, Philippines - Manila is Asia Pacific’s top office market as it outpaced other areas in the region in terms of absorption of office space as of the third quarter of 2013, commercial real estate services firm Cushman and Wakefield said.

“Manila has outperformed the rest of the Asia Pacific region in terms of net absorption of office space,” Cushman and Wakefield general manager for the Philippines Joe Curran said in a briefing yesterday.

Citing research conducted by the firm, he noted that as of the third quarter of this year, net absorption of office space in Manila was at an estimated 482,126 square meters (sqm).

This was higher compared to nine other top markets named in the same period such as Mumbai (314,528 sqm), Bengaluru (287,630 sqm), Chennai (263,303 sqm), Guangzhou (250,114 sqm), Pune (225,117 sqm), Chengdu (222,336 sqm), Shenzhen (185,450 sqm), Kuala Lumpur (184,925 sqm), and Seoul (133,604 sqm).

Curran noted that new supply which came in the same period in Manila was at 332,786 sqm.

Office space in Taguig City accounted for 59 percent of the absorption, followed by Makati City with 29 percent.

As a result of the high net absorption in the office space, vacancy rate across Metro Manila is at 4.3 percent.

Curran said the stable growth in the business process outsourcing sector has primarily been driving the demand for office space in Metro Manila.

He noted that absorption of office space in Metro Manila is seen to increase as demand continues to grow over the next three to five years.

“The trend we are seeing is increasing absorption. This means that companies are going to be expanding and increasing their headcount,” he said.

Incoming office supply for the fourth quarter of this year until 2015

is estimated by the firm to reach 1.2 million sqm in Metro Manila.

“Overall, rents will experience upward pressure but will remain competitive in the region,” Curran said.

He also noted that demand for green buildings in Metro Manila is seen to increase.

Cushman and Wakefield chief executive officer for Asia Pacific Sanjay Verma said the rise in demand for green buildings is expected as more companies want to take part in saving the planet.

“More and more companies are putting it (green buildings) in the criteria if you compare it to 10 years ago but it is not a deal breaker,” he said.

Founded in 1917 in New York City, Cushman and Wakefield is the world’s largest privately-held commercial real estate services firm with approximately 16,000 employees operating from 250 offices in 60 countries.

The firm set up its office in the Philippines last year.