Property consultant Colliers has noted a tapering off of office space developments, with some projects being shelved altogether.
Colliers expects office space rents to drop 5 percent for the year before picking up by late in 2023. Vacancies are projected to go up as more spaces come online.
Kevin Jara, Colliers associate director for tenant representation, said vacancy in Metro Manila is expected to hit 21 percent by the end of the year, up from the 18.7 percent recorded in the first quarter this year.
Jara said with Metro Manila office space stocks at 18.7 million square meters (sq.m.), developers have started to slow down on developments with some projects being shelved totally.
First quarter figures of new office space were recorded at 40,000 sq.m., significantly lower than the 306,000 sq.m. posted in the same period last year.
A total of 569,000 sq.m. of additional office space is expected to come online this year, followed by another 544,000 sq.m. next year and 400,000 sq.m. in 2025 and 2026 – mostly located in Quezon City and Fort Bonifacio.
Jara said another 166,000 sq.m. of space were put on hold or totally shelved.
“This tapering off this will continue over the next four years,” according to Jara.
Colliers said new office transactions for the first quarter of the year were “muted” as many office locators from the business process outsourcing (BPO) adjust to a work- from-home setup.
Colliers said as BPOs shift to Board of Investments-accredited operation to take advantage of tax breaks for their work- from- home arrangements, new office spaces taken up has significantly declined to 48,000 sq.m. from 34,000 sq.m. in the fourth quarter of last year and from 93,000 sq.m. in the third quarter last year.
