Office space vacancy in Metro Manila widened by nearly a fifth in the first quarter of 2024, according to consultancy firm JLL Philippines.
It said office vacancy reached 19.9 percent of the available stock of 10.97 million square meters (sq. m.) in the first quarter from 17.6 percent of 10.35 million sq. m. in the same period in 2023.
“We have elevated vacancy on double-digits, variable across cities, sustained by the impact of work from home or hybrid work arrangements,” said JLL head of research and strategic consulting Janlo de los Reyes.
Vacancy levels also doubled from the pre-pandemic figures of 8 percent to 9 percent.
It is forecast to end 2024 at 22 percent, with an additional 500,000 sq. m. of new offices spaces coming in. The additional inventory is expected to ease supply pressure in the market, de los Reyes said.
Among the business districts, the Makati CBD had the biggest vacancy level of 1,900 sq. m. JLL said the high level of vacancy in the business district is expected to ease the pressure on rents.
It said while rents remained generally unchanged from 2022 to 2023, they are expected to plateau at P1,000 per sq. m. by end -2024, a trend that may attract more tenants.
Transacted rents remained consistently below headline rents from the second half of 2022 to the first quarter of 2024, averaging at P930 to P950 per sq. m. These are lower than the pre-pandemic rates of P1,100 to P1,400 per sq. m.
Business process outsourcing (BPO) companies drove the growth in leased spaces and accounted for 68.9 percent in the first quarter of 2024, while corporate occupiers represented 31.1 percent.
Metro Manila registered 97,000 sq. m. of leased spaces in the first quarter, with BPOs accounting for the biggest share of the pie. The growth was tempered by an increase in released spaces.
Moveouts in the first quarter reached 97,365 sq. m., slightly up from 96,494 sqm in the first quarter of 2023.