Metro Clark office vacancies reach 34.3% in H2 2022

The expansion of the IT-BPO sector will push Metro Clark’s rebound this year.

Vacancies in the office sector in Metro Clark increase to 34.3% of the total stock due to the flat net absorption during the year with a new supply of 96,200 square metres (sq m) but is expected to recover this year.

In a report, KMC Savills said the Clark Freeport Zone (CFZ) is still reeling from the exit of the Philippine Offshore Gaming Operators sector. Grade B buildings, meanwhile, remain resilient with a vacancy rate of 18% in the fourth quarter.

The rental decline also sped up by 4.2% year-on-year (YoY), Savills said, noting that Angeles saw the fastest decline at 5.9% YoY, the worst value since the third quarter of 2021.

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Grade B buildings rent in the CFZ was down to below $9.21 (P500) per sqm a month, bringing the Metro’s average monthly rent to $9.25 (P502.2) per sqm.

“Although leasing activity in Metro Clark was disappointing in 2H/2022, we still forecast demand to rebound this year with the expansion of the IT-BPO sector outside Metro Manila,” Savills said.

It added that Grade B buildings had been more successful in the latter half of 2022 due to their affordability. However, the vacancies would put further pressure on rents, particularly on the Grade A buildings in CFZ.

Rents for Grade A buildings may decline to below $9.21 (P500) per sqm for occupancies, returning to pre-pandemic levels.

$1 = P54.29