PROPERTY consultant Colliers International said office transactions in Metro Manila in April was only at 8,000 square meters (sq.m.), down 84 percent from a year ago.
The April figures kept the year-to-date transactions at 383,000 sq.m., at par with last year’s 382,000 sq.m.
“This is attributed to the increasing trend of outsourcing transactions during the 1st quarter prior to the decline due to the COVID pandemic. Moreover, majority of the transactions for the month were driven by traditional companies,” Colliers said.
“While outsourcing and traditional companies are seen to drive the office market amid the COVID-19 pandemic, current office transactions data show that companies are still taking a wait-and-see stance while some have held back on their growth plans for the mean time,” it added.
While there is no definite timeline when the market rebound will happen, “companies need to take incremental actions and decisions during this period and be prepared for all possible scenarios,” Colliers said.
“As businesses thrive on cost-saving solutions during this time, future business decisions should not be compromised,” it said.
Colliers pointed out the COVID-19 pandemic has substantially changed the global economic landscape and businesses “will have to operate under a new normal moving forward.”
“Without the vaccine, we will have to operate under worse conditions, yet business actions and decisions must be taken soon in preparation for the market rebound,” it said.
Colliers said space lessors now have to consider the feasibility of remote work as well as revisiting the density ratio and workplace design.
Developers should also explore opportunities to negotiate with longer lease terms and look into fringe locations for cheaper rents, while watching for business district options with revised rental rates.
Property owners meanwhile should consider lease extensions in exchange for rent-free concessions to prevent defaults, Colliers said.
They should also work with existing occupiers to provide flexible lease terms while reviewing their properties’ wellness and building design features (e.g. air circulation, glass ratio and LEED/WELL certifications).
Developers should also target epidemic-resilient occupiers that cater to essential goods and services (e.g. data centers, pharmaceutical companies and other health care related industries), Colliers said.
