Property consultant Jones Lang LaSalle (JLL) said office space leasing in Metro Manila grew 67 percent last year, to 669,000 square meters (sq.m.) compared to the previous year’s 401,000 sq.m.
“As of the fourth quarter of 2022, corporates (51.5 percent) outpaced offshoring and outsourcing (O&O) demand (44.8 percent) in Metro Manila, with media (31 percent) and banking (24 percent) occupiers accounting for most of the corporate occupiers,” JLL said.
According to JLL monitoring, corporate accounts accounted for 51.5 percent of take-up; O&O at 44.8 percent; media, 31 percent and; banking, at 24 percent.
“From a year-to-date perspective, however, O&Os still led transaction volumes (65.2 percent, versus corporate occupiers at 28.6 percent),” JLL said.
“The sudden shift in the final quarter may be attributed to occupiers’ holding off decisions on transfers relative to incentives in December 2022,” it added.
JLL said rightsizing among occupiers continue with 129,949 sq.m. of spaces released by occupiers in Metro Manila by the fourth quarter of last year.
“In relation to this, Metro Manila vacancy rose behind weaker leasing demand and new supply,” it said.
Lizanne Tan, JLL Philippines head of office leasing advisory, said how work arrangement evolve will define the landscape for office leasing in the country.
“Hybrid is now a non-negotiable element of the workplace ecosystem,” Tan said, noting that office location decisions will gravitate towards places where people can socialize, shop, live, work and eat.
Tenants are also likely to prioritize markets with a strong talent pool to accelerate innovation, she added.
The Metro Manila office sector is expecting around 1.2 million sq.m. of incoming stock until 2025, JLL meanwhile said office leasing in Metro Cebu sustained despite headwinds.
Take up was recorded at 43,664 sq.m in the fourth quarter compared to 41,853 sq.m. in the third quarter of last year.
“In Metro Cebu, however, O&O continued to lead transactions (87.0 percent), followed by flexible workspace (13 percent),” it said.
Vacancy in Metro Cebu continue to decline, now at 17.8 percent.
Metro Cebu expects to add 194,700 sq.m. in office space up until 2025.
Rents at the same time are expected to remain soft for both Manila and Cebu.
