The office space market in the Philippines is setting new records, led by demand from business process outsourcing (BPO) companies and multinationals, indicating growing business confidence, according to one of the country’s largest property consulting firms.
In a briefing on Monday, Jones Lang LaSalle Leechiu’s (JLLL) director for project leasing, Sheila Lobien, said that from January to November 2012, demand for office space rose to a total 425,000 square meters, and may rise further by yearend.
This level is at least 18 percent higher than the annual average demand of 360,000 sqm recorded in 2011.
Non-BPO firms consisting of multinational and local companies accounted for 100,000 sqm, or 25 percent of current demand, she said.
More importantly, companies are already committing to take up space even before office buildings are completed, indicating strong optimism and higher business activity projected for 2013.
Pre-commitments are backed up by signed lease agreements between parties, and advanced rent and security deposits are paid by the lessee.
Lobien said pre-commitments more than doubled in January to November 2012 as compared to the same period last year.
“In the 11 months of 2011, we recorded pre-commitments of 68,358 square meters,” said Lobien. “In 2012, the figure over the same period shot up to 175,922 square meters.”
JLLL studies also noted that a number of companies pre-committed to office space that would be completed as far forward as 2014.
The consulting firm’s findings confirmed a recent study of 22 cities in the Asia-Pacific region conducted by the Urban Land Institute entitled “2013 Emerging Trends in Real Estate.”
The study noted the increased attractiveness of Manila in terms of both investment and development prospects vis-a-vis investors, developers, property company representatives, lenders, brokers and consultants.