The great return | Inquirer Business
Colliers Review

The great return

We are seeing good prospects for the Metro Manila office market, which we hope can be sustained beyond 2022.

For 2022 alone, we are projecting the delivery of about 820,000 sqm of new office space. From 2023 to 2026, we see an annual completion of close to 500,000 sqm. Colliers Philippines believes that the completion of these additional office spaces across Metro Manila from 2022 to 2026 is likely to support the recovery of the office sector.

As of the first quarter this year, we have already seen 306,100 sqm of new office space coming online. This is more than double the 114,300 sqm completed in the fourth quarter of 2021. Some of the buildings due to be completed for the remainder of the year include Makati Commerce Tower, Park Triangle Corporate Plaza, Filinvest Axis Towers 3 & 4 and SM Fairview Towers 2 & 3.


Positive net take-up

In terms of take-up, Colliers recorded about 146,100 sqm of office deals in the first quarter of 2022, up from the 134,100 sqm in the previous quarter. Traditional and outsourcing firms dominated office space take-up during the period. Some of the notable transactions include Facebook, Lazada, Arcadis, Orix and ePerformax, which took up office space in Fort Bonifacio, Makati central business district (CBD), and the Bay Area.


Colliers believes that traditional and outsourcing firms are likely to lead office space absorption in 2022. It’s worth noting that the Philippine Economic Zone Authority (Peza) earlier required information technology and business process management (IT-BPM) firms to implement a hybrid work model, with 70 percent working on site while only 30 percent are on a work-from-home (WFH) arrangement. A survey by the Information Technology and Business Process Association of the Philippines (IBPAP) showed that about 80 percent of Filipino employees prefer WFH over working on-site, while 90 percent are reportedly more productive in a hybrid model.

Meanwhile, Colliers saw vacancy increasing to 17.3 percent in the first quarter from 15.7 percent the previous quarter due to the delivery of 306,100 sqm of new office space. We revised our yearend forecast to 18.2 percent from 18.9 percent due to our projected completion of 821,900 sqm of new supply.

Net take-up for the first three months of 2022 thus reached 26,400 sqm, up from the -130,100 sqm in the fourth quarter of 2021. This is the first recorded positive net absorption after seven consecutive quarters of negative net absorption.

Colliers sees net take-up hitting 350,000 sqm this year, after a cumulative negative net take-up of 454,400 sqm in 2020 and 2021. Colliers believes office space absorption is likely to be supported by firms’ return-to-office mandates.

Makati, Ortigas CBDs

Colliers Philippines is optimistic that Makati CBD and Ortigas Center will continue to corner office space deals in Metro Manila. After all, these are still among the most preferred business hubs in the capital region.

Over the past few quarters, these business hubs attracted major outsourcing deals, including leases from higher-value knowledge process outsourcing (KPO) companies. Complementing this is the construction of crucial public projects including Pasig River expressway, Estrella-Pantaleon Bridge, BGC-Ortigas link bridge, and the Makati subway.


The 1.48 km BGC-Ortigas Link Bridge became operational in October 2021. This P1.8 billion project, which connects Fort Bonifacio and Ortigas, is likely to reduce congestion in the country’s main thoroughfares such as Edsa and C-5.

Meanwhile, the Makati Subway is an 11-km underground subway that will connect key areas in the financial district. The $3.7 billion project will have 10 stations and can likely accommodate 700,000 passengers daily.

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TAGS: Business, colliers review, property

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