Property consultant Colliers said vacancy in the office spaces of Metro Manila hit 18.4 percent in the first half of the year, up from 17.9 percent as supply outpaced take-up for the period.
Still, the company noted a decline in vacancy in the second quarter compared to the first quarter’s 18.7 percent, attributed to improved transactions and a slowdown in non-renewals for the period.
“Net absorption for the second quarter has improved, mainly driven by higher transactions volume coupled with the slowdown in vacated spaces,” Colliers said, expecting higher net take-up by year-end.
“Elevated vacancy is still expected due to more supply coming online in the latter part of the year,” Colliers added, as it pegs the full year vacancy to hit 21.2 percent.
Kevin Jara, Colliers associate director for tenant representation, noted a slowdown in non-renewals of contract and pre-termination that contributed to the improvement of vacancy in the second quarter.
For the second quarter, Colliers recorded 80,400 square meters (sq.m.) of new office space going online, with the completion of Primex Tower in San Juan and Parqal Buildings 1-9 in the Bay Area.
“We project 538,900 sq.m. of additional supply coming online in the second half 2023, with Fort Bonifacio, Ortigas CBD (central business district) and Quezon City likely accounting for nearly two-thirds of the new supply,” Colliers said.
For the full year, Colliers expects supply to receive a total of 668,400 sq.m., higher than its previous estimate of 569,100 sq.m., as some projects are accelerated to accommodate upcoming demand.
Tenants, meanwhile, contracted a total of 306,000 sq.m. in the first semester, down 5 percent from 324,000 sq.m. last year, with traditional offices and the information technology-business process management (IT-BPM) cornering 41 percent of the demand each, and the remaining 18 percent contributed by demand from the Philippine offshore gaming operation (POGO).
