Office space demand expanded by 80.5 percent to nearly 1 million square meters as of the second week of December on the back of the expansion of the business process outsourcing industry, a property research firm said Monday.
A study by Leechiu Property Consultants showed that demand reached 975,000 square quarter meters, up from 540,000 sq. m. in 2021 when mobility restrictions were still in place. The government started easing border controls in the first quarter of 2022.
LPC chief executive David Leechiu said in a news briefing BPO firms accounted for bulk of the demand for office in 2022, totaling 466,000 sq. m. even as some BPO companies continued to implement hybrid work model, which allowed some employees to work from home and others on site.
The traditional office locators also registered a substantial take-up of 448,000 sq. m.
Leechiu said office take-up accelerated in the third quarter after political and other uncertainties were resolved following the May presidential elections.
“Up to mid-2022, it was difficult to visualize year-end demand hitting close to the 1-million-sq. m. mark,” Leechiu said. “The results have exceeded expectations, but we can’t put our guard down just yet.”
Leechiu said he expected the strong demand to continue in 2023.
Data showed of the total 2022 office demand, Metro Manila accounted for 724,000 sq. m. or around 74 percent, with Bonifacio Global City taking up 232,000 sq. m. and Makati, 198,000 sq. m.
Outside Metro Manila, Cebu City was the preferred location, taking up 92,000 sq. m., followed by Davao at 50,000 sq. m. and Clark at 49,000 sq. m.
The sustained demand for office space was tempered by significant vacancies in some business districts and additional supply that would come from buildings that are about to be completed in 2023.
Office vacancy rate across Metro Manila was at 18 percent, with Makati having the highest level at 572,000 sq. m.
LPC director for commercial leasing Mikko Barranda said the IT-BPM sector remained the largest Philippine employer, as the industry hired an additional 265,000 employees in the last three years of the pandemic. He said that in 2021 and 2022, the sector recruited 120,000 employees annually.
“We can thus expect office demand from this sector to continue growing, more so because IT-BPM industry studies estimate that 1.1 million more full-time employees will be hired in the next six years. This could mean, at the least, an additional annual 476,000 sq. m. of office space requirement up to 2028,” Barranda said.