MANILA -- Office spaces in Metro Manila are getting more expensive as shown by the latest report of property consultancy services company Santos Knight Frank, which revealed that the weighted average for leasing such facilities has now breached the PHP1,000 per square meter (sq.m.) mark.
In a media briefing Tuesday, the firm's Director for Occupier Services and Commercial Agency Morgan McGilvray said office lease rates in Metro Manila are now averaging PHP1,042.35 per square meter, the first time in history the it broke through the thousand peso barrier.
Among central business districts (CBDs) in Metro Manila, he said Makati CBD still has the highest weighted average lease rate at PHP1,419.68 per square meter.
In contrast, Ortigas CBD is becoming the least expensive office market, he said, In the past years, Alabang CBD and Bay Area offered the lowest office lease rate in Metro Manila.
McGilvray noted that this increasing lease rate, coupled with continued supply of spaces, is a sign of a healthy office market.
“It’s actually exceeding the PHP1,000-mark, I believe, for the first time. And that’s just a sign that the market is continuing to grow -- more buildings in the market, rents are going up,” he said.
He also mentioned that vacancy rate of office buildings in the National Capital Region (NCR) is at 4.88 percent in the fourth quarter of 2018 as there were 373,331 sq.m. additional supply in the market.
McGilvray said the business process outsourcing (BPO) sector is still driving the growth of the office market in the country, but the increasing demand for coworking spaces is a new source of expansion for the property market.
A big chunk or around 38 percent of coworking spaces in Metro Manila is located in Makati City, followed by Taguig, Quezon City, and Ortigas.
Overall outlook for the property sector for 2019 remains rosy, according to Santos Knight Frank Chairman and Chief Executive Officer Rick Santos.
Among the trends that support the growth of the local real estate include the continued economic growth, booming tourism sector, changing dynamics of retail, and more industrial and logistics projects.
“In general the market fundamentals across the office sector, residential sector, the retail sector, the industrial sector are quite strong,” Santos said. (PNA)