Online gaming firms driving up office rent in Metro Manila

Coming from a seven-year boom, Philippine landlords would continue to enjoy higher office rental rates this year as business process outsourcing (BPO) remained robust and with online gaming, an emergent sector, also joining in the chase for fast-dwindling office inventory.

There would be enough demand to meet a rush of new Metro Manila office spaces as seen from the unprecedented level of “pre-commitments” from tenants signing leasing deals ahead of building completion, Leechiu Property Consultants (LPC) president David Leechiu said in a recent press briefing.

One big surprise was how fast online gaming firms, recently licensed by the state-owned Philippine Amusement & Gaming Corp., were gobbling up office space, Leechiu said. In the last six months, a total of 84,000 square meters, mostly in the Bay Area, had been taken up by this sector.

Office rental rates may rise by an average of 7-10 percent this year, Leechiu said.

Average monthly rental rate for prime and grade A office space in Makati is estimated by LPC to average at P1,500 per square meters (sqm) this year while rental rate in BGC is estimated at P1,400/sqm. Back in 2010, Makati and BGC rental rates were at P800/sqm and P575/sqm, respectively.

Rental rate in Quezon City is estimated to average P800/sqm this year while in Alabang and Bay Area, average rental rate is seen at P700/sqm. Ortigas Center space is seen to fetch P650/sqm.

In 2010, tenants paid only P450 monthly to rent each square meter of office space in Quezon City while they paid P500/sqm in Alabang and Bay Area and only P300/sqm in Ortigas Center.

With very few space for offices in the metropolis, Leechiu said BPO firms would continue to look for new and untapped labor markets elsewhere in Luzon and the Visayas. Doris Dumlao-Abadilla