Manila to see 808,900 sqm of new office space this year

The vacancy rate is forecast to hit 18.2% by year-end.

Property analyst firm Colliers believes that the Philippine property sector is well poised to ride the country’s economic growth trajectory. 

According to its recent report, Manila is expected to see the completion of 808,900 sq m of new office space in 2022. From 2023 to 2026, the analyst forecasts that an average of 543,300 sq m of office space will be completed annually.

Here’s more from Colliers:

We anticipate that vacancies in the office market will continue to rise, reaching 18.2% by end-2022. Colliers expects office rents to bottom out by 7% in 2022 before a recovery in 2023. Meanwhile, office space absorption for the remainder of 2022 should be supported by traditional and outsourcing firms. 

We believe that improving business and consumer sentiment, as well as sustained Overseas Filipino Worker (OFW) remittances, should support residential demand going forward. 

However, Colliers anticipates that headwinds such as rising interest rates, compressing yields and increasing prices of construction materials are likely to hamper launches across Metro Manila for the remainder of 2022. 

Expert view 

We expect the recent growth trend in market inquiries to be sustained until year-end. Investors are seeking value across all asset types, with the aim of long-term use.