A property consultancy firm asked real estate developers to work closely with flexible workspace operators while highlighting the projects’ sustainable features.
Colliers Philippines, in its latest office space report, forecasts increased demand for flexible workspaces because of changes in the work-from-home regulations of the government.
“Our forecast for a gradual market recovery in view of market headwinds like the increased WFH [work-from-home setup] allowed under the Board of Investments should compel developers and tenants to zero in on opportunities,” Colliers said.
The firm recommended that flexible workspace operators expand to capture demand from smaller space requirements and hybrid work models such as hub-and-spoke.
Data showed that as of third quarter, flexible workspace vacancy in Metro Manila was at 20 percent, down from 38 percent in the second quarter.
Colliers said office transactions in the first nine months climbed 72 percent year-on-year—an indication of improved leasing activities in Metro Manila as the market sustains its recovery.
Outsourcing and traditional firms continued to lead office space absorption within and outside Metro Manila. A further correction in rents is expected by yearend before bottoming out in 2023, it said.
Outsourcing firms dominated deals in the third quarter. Colliers said it was expecting a net absorption at 140,000 square meters by the end of the year, compared to −273,300 sq. m. net take-up in 2021.
Colliers advised tenants to continue implementing “flight-to-quality” by taking advantage of newer buildings offering discounted rates and incentivizing employees to return to the office.
It said vacancy increases would continue to be supply-driven, with Quezon City and Fort Bonifacio dominating new completion. Vacancy in the third quarter was at 17.7 percent.
“By the end of 2022, we see vacancy rising to 19.5 percent due to new supply as well as muted pre-leasing in upcoming buildings,” Colliers said.