MANILA, Philippines — Office vacancies in Metro Manila rose by almost a fifth in the first quarter, even as lease rates fell slightly in the country’s urban capital.
Jan-Loven de los Reyes, head of research of property consulting firm JLL on Thursday said the vacancy rate was at 19.9 percent from January to March, up from the 17.8 percent seen in the same period a year ago.
De los Reyes said they expect office vacancies in Metro Manila to climb further to an average of 22 percent this year.
“The reason for that is we expect around 500,000 square meters (sq m) of office stock coming in that would apply supply pressure in the market considering that we have elevated vacancy levels,” De los Reyes said during a press briefing at the JLL office in Makati.
Vacancy rates in prepandemic times were at just 8 percent to 9 percent, according to JLL data.
He added that the vacancy rates have been heavily influenced by the impact of the pandemic, which resulted in some businesses rightsizing their companies and fixing their office space uptake.
“What’s been happening now [is] it’s more of redefining how you look at office space. So, more collaborative, more focused areas,” said the JLL executive.
Highest vacancy
Parañaque had the highest vacancy rate, at 50 percent, among the 12 city market segments in JLL’s records.
This was followed by Manila at 38.1 percent, Muntinlupa at 28.3 percent, Pasay City at 24.1 percent, and Quezon City at 20.9 percent.
Vacancy rates were at 18 percent in Makati, 17.9 percent in the Ortigas Central Business District, 17.1 percent in Mandaluyong, 16.8 percent in Pasig, 15.4 percent in the Makati Central Business District, 15 percent in Taguig, and 9.1 percent at the Bonifacio Global City (BGC).
The JLL executive also shared data showing that headline rents in the first quarter eased to P1,004 per sq m from P1,039 per sq m during the same period last year.
By location, BGC had the highest average rent, which reached P1,280 per sq m during the three-month period.
The Makati Central Business District recorded an average rent of P1,265 per sq m, Makati City with P1,210 per sq m, Taguig City with P1,202 per sq m and Pasay City with P996 per sq m.
Meanwhile, the average rent was at P961 per sq m in Parañaque, P834 per sq m in Mandaluyong, P807 per sq m in Quezon City, P784 per sq m at the Ortigas Central Business District, P781 per sq m in Muntinlupa City, P755 per sq m in Pasig and P709 per sq m in Manila.
De los Reyes said they expect rentals this year will plateau to an average of P1,000 per sq m, citing again the impact of the office stock volume expected this year.