The Philippines saw brisk demand for office property despite the imposition of strict lockdown measures amid the coronavirus (COVID-19) pandemic, defying the sluggish market seen elsewhere in the world.
This is according to property market veteran David Leechiu, chief executive officer of real estate consulting firm Leechiu Property Consultants, who reported that 211,000 square meters (sq m) of office space had been taken up in the first five months of the year, despite the imposition of the enhanced community quarantine (ECQ) and modified ECQ (MECQ) from March 15 to May 31. This marked an increase of 34 percent from the 157,000 sq m of demand recorded before the ECQ.
This meant that 54,000 sq m of office property deals were concluded during the full lockdown months of April and May.
“We expected zero demand in the second quarter of 2020 but despite the ECQ/MECQ, we’ve seen transactions concluded. The Philippines is most likely the only office market in the world that sees growing demand today. We also expect IT-BPM demand to surge once more by the end of the year when the Philippines, United States and other countries would have adapted to a new normal,” Leechiu said.
Of the office property demand seen in the country so far, Metro Manila accounted for 60 percent of the deals while 40 percent of the deals were concluded in the provinces.
IT-BPM accounted for 37 percent of office demand in the first five months, followed by online gaming or Philippine offshore gaming operator (Pogo) players with a share of 13 percent. The remaining 50 percent of office space was taken up by traditional offices, corporate tenants and flexible workspace operators.
Demand from the IT-BPM and Pogo sectors, combined with improving investor and public confidence, should bring up office demand to some 800,000 sq m by the end of the year, Leechiu projected.
Leechiu recalled that during the global financial crisis of 2008, the Philippines was also the only market in the world where office demand did not contract, owing to the expansion of the IT-BPM sector. Office demand from the IT-BPM sector has been stable and growing modestly throughout the decade. INQ