Metro Manila seen remaining attractive as office location
METRO MANILA has remained an attractive location for office space in the Asia Pacific region as more investors choose to locate and expand their respective businesses here, according to global property consultancy firm CBRE.
“Local and international investors are driven to locate in Manila due to the availability of affordable yet more than qualified labor, and adequate infrastructure and developments across the different office districts,” CBRE Philippines CEO, chair and founder Rick M. Santos said in an interview.
“[There is also an] increased confidence in the economy which stemmed from the continuing confidence in the current administration and anticipation of faster roll out of government infrastructure-related projects under the public-private partnership program,” he added.
Metro Manila’s office property boasts of key advantages that could be crucial to a company’s operations, Santos said. For one, Metro Manila provides companies access to a large qualified yet affordably priced talent pool as most of the labor force resides within the area or in close proximity to it.
Metro Manila also boasts of lower rents without compromising on the quality of the office building features and amenities.
“Rents [in Metro Manila] have remained one of the lowest in region at around $32 per square foot per annum in the Makati (central business district).
Rates in other office districts such as Bonifacio Global City (BGC), Ortigas and Alabang are lower, most likely below $30 per square foot per annum. This despite the continuous turnover of new office space across the different office districts. Healthy occupier demand and tight space availability support the solid rental growth in Metro Manila at 8.8 percent year-on-year,” Santos explained.
Santos further pointed out that setting up an office in Metro Manila allowed an investors to benefit from lower operational costs and available ancillary developments, such as residential and retail within and in close proximity to the different office districts.
The office segment in Manila’s property market has remained robust, fueled largely by the continuous growth of the business process outsourcing (BPO) sector in the country. Of the total space rented out over the past several years, Santos said at least 70 percent was accounted for by BPO companies or multinational companies.
Overall, CBRE remained upbeat on growth prospects in the Asia Pacific office property market for the second half of the year, as demand continues to be driven by expansion in key cities within the region.
According to CBRE, rents increased by 0.7 percent quarter-on-quarter, but a corresponding increase in vacancy to 9.1 percent is expected to slow down further hikes in rental rate in the region
