MANILA, Philippines?Office rental rates in the Makati business district have reached an all-time high, while its vacancy rate registered a record low due to surging demand and lack of new supply.

Despite this, property consulting firm CB Richard Ellis (CBRE) said that there is little danger of a repeat of the real estate bubble that hit the country in the previous decade because of fundamental differences in the present-day market structure.

In a press briefing, CBRE research director Victor Asuncion said that most buildings that have been built recently?as well as those that have yet to be built?already have guaranteed anchor tenants, most of which are from the business process outsourcing (BPO) industry.

In contrast, most developers in the 1990s built large, high-rise structures in anticipation of demand that evaporated with the outbreak of the East Asian financial crisis.

?The difference is in the demand, and the type of structures being built,? he said, explaining that much of the new office space coming up consists of purpose-built structures for BPO firms. ?There is no bubble.?

During the presentation, CBRE vice chair Joey Radovan said that Makati CBD office rates have already reached the P1,200 per square meter mark as of the latest rent transaction.

This beats the previous record high of P1,100 also set last year.

Also, the office vacancy rate in Makati has hit a historic low of 1.39 percent?a level that has not been experienced even during the height of the economic boom in the early 1990s.

CBRE general manager Trent Frankum said levels of both rental and vacancy rates are ?unsustainable? and would likely ease in coming months as new supply of office space comes online.

The firm predicts a ?soft landing? of the office market?with rental rates stabilizing close to current levels and vacancy rates rising slightly?instead of a speculation-induced crash as was experienced in the late 1990s.

CBRE also believes that the local property sector?as well as the broader economy?will likely benefit from any economic slowdown in the US as more North American firms cut costs and send back office operations overseas.

?There is no property slump in the Philippines now because developers learned our lessons very well in 1997,? it said. ?They do not build anymore on pure speculations, they build on actual demand. If the additional demand does not come, then they shift gear and hold back any planned construction.?