Manila braces for influx of new office supply 

Over 600,000sqm of new stock is expected to enter the market this year.

According to a Savills report, a slowdown in construction has pushed back the completion dates for office buildings across Metro Manila. 

This translates to a significant bump in completions anticipated for 2024. The market is bracing for a substantial influx of brand-new office space – a staggering 634,000 sq m. 

Here’s more from Savills:

Notably, Bonifacio Global City (BGC) is set to receive the largest portion of this influx, accounting for nearly a third (30%) of the new office space. The Bay Area follows closely behind, expected to absorb 22% of the new completions. This influx could significantly impact vacancy rates, particularly in districts with a high volume of current office space still available, potentially creating a tenant’s market and putting downward pressure on lease rates. 

In the past five years, the supply of office space in fringe areas of major CBDs has stagnated, with the exception of Makati Fringe which has seen consistent growth, reaching a total of 227,000 sq m. This stands in stark contrast to other areas like McKinley Hill, which only saw a contribution of 39,000 sq m in 2021. 

Greater Ortigas hasn’t fared much better, with Estancia 2 being the sole new building constructed in the district in 2019, adding a mere 17,000 sq m to the overall supply. This trend suggests a potential mismatch between supply and demand in these fringe areas, with Makati Fringe emerging as the only consistent performer.