Manila net office take-up to reach 3.3m sq ft this year

And residential vacancy rates could ease to 16.2%.

Colliers expects office leasing in Manila to recover and forecasts net take-up to reach 307,400 sq m (3.3 million sq ft) in 2022 with outsourcing and traditional occupiers dominating absorption in Metro Manila over the next 12 months. 

The analyst also believes that the narrowing rental gap between central business district (CBD) and non-CBD locations due to rental correction should enable occupiers to implement flight-to-quality measures. 

“In the residential market, we expect vacancy rates to ease to 16.2% in 2022 backed by economic recovery, a rebound in office leasing and the return of expatriates to the Philippines,” said Paul Chua, Colliers’ Director for Capital Markets & Investment Services.

Here’s more from Colliers:

In 2021, Colliers recorded 422,400 sq m (4.5 million sq ft) of office transactions, up 18% from 357,400 sq m (3.8 million sq ft) in 2020. Traditional occupiers from the e-commerce and financial services sectors led take-up in 2021. 

Further, we saw the delivery of about 633,900 sq m (6.9 million sq ft) of new office space in 2021, up 48% from the 427,900 sq m (4.6 million sq ft) in 2020. We recorded the completion of 8,731 in 2021, up 159%. 

All of the new units came from the Bay Area and Fort Bonifacio, with the former accounting for 86% of the supply. The new supply primarily helped push vacancy rates up to 17.9% in Q4 2021 in the Metro Manila secondary residential market.