Office take-up in Metro Manila’s major central business districts remains robust on the back of a 25-percent increase in demand by the gaming sector, real estate advisor Santos KnightFrank said Wednesday.
Gaming locators found the Philippines as an attractive site for gaming operations given the minimum requirement of a “Philippine offshore gaming operator” license and “no objection from local government” permit.
“Can’t say what the growth will be for gaming in 2018, but there’s a lot, I assume. In fact, there is an entire building supposedly for a BPO firm that was occupied entirely by a gaming company,” said Santos KnightFrank executive director for occupier space and commercial agency Francis Bautista.
The building, which has a floor area of 15,000 to 20,000 square meters, is located in the Makati CBD, he said.
Bautista said having an entire building for gaming could be an emerging trend in the office lease or rental space. “At least we’re not overly dependent on BPOs [business process outsourcing] although BPOs are doing support for gaming,” he said.
The BPO sector continues to account for the bulk of the demand, representing about 70 percent in office take-up.
The property consultancy firm said the office space take-up of BPOs was projected to increase further after the Philippine Economic Zone Authority resumed releasing occupancy certificates for BPO firms.
It noted that gaming operations also influenced the rise in office rental fees that hit an average of P920 per square meter.
An assessment of Manila office absorption showed that office rental growth reached 4.3 percent year-on-year in the third quarter of 2017, as vacancy rates remained at a good level with 220,000 square meters of additional office stock during the quarter.
Office take-up for the whole of 2017 is expected to reach above 600,000 sqm. Over 3.7 million square meters of office gross leasable area is estimated in the next five years, according to Santos KnightFrank.
A total of 946,782 square meters of leasable office space is expected to be added to the current supply by 2018. Around 409,377 square meters or about 76 percent of the total upcoming supply will be in Bonifacio Global City in Taguig.
Meanwhile, prices across residential segments rose, with the luxury residential growing the highest at 28 percent year-on-year. More than 52,000 residential units are slated for turnover before the end of 2018.
Santos KnightFrank said that in the retail sector, an estimated gross floor area of more than 182,300 square meters of shopping mall space was anticipated to be turned over before yearend.
Majority of the expected turnovers are located in Pasig and Bay Area while upcoming retail developments in the next three years will add an estimated GLA of 630,000 sqm. to the total retail stock.
About 43.2 percent of the total upcoming inventory is in Pasay City and 15.1 percent in Muntinlupa City/Alabang, with increments from Pasig, Makati, Taguig and Quezon City.