Within just five years, the Philippine economy has grown by 6 to 7 percent thanks to foreign investment-friendly policies and incentives along with remittances from overseas Filipino workers. It is building up the country’s top business centers in Metro Manila, mainly attracting call center seat lease in Manila, POGO businesses, and shared office spaces in Manila.
Real Estate Growth in Manila Office Developments
Ernesto Pernia, Socioeconomic Planning Secretary of the Philippines estimated the projected public spending on infrastructure between 2017 and 2022 to be at about 6.79 trillion pesos (US$130 billion). Infrastructure developments took up around 5.1% of the country’s economic activity in 2018. A record 805,000 square meters (sqm) of office space was completed that same year, outperforming 2017’s completed 761,100 sqm of gross leasable area developed.
This 2019, Colliers predicts that new supply would reach another 1 million sqm as office space net absorption reached a record 1.18 million sqm the year before. The local real estate consultancy Jones Lang LaSalle (JLL) head of research, consulting and valuation services department Claro Cordero remarks that grade A office stock in Makati alone, the country’s premier business and financial district and nearby Bonifacio Global City (BGC) totaled 700,000 sqm that year. As for the entire Metro Manila, it boasted a total of 11.01 million sqm grade A and B office spaces at the end of 2018.
Office Real Estate Markets in Metro Manila
However, the market demand grew just as fast and the net absorption leveled the added supply at 629,500 sqm in the Makati region alone, resulting in low vacancy rates at just 4.5 percent of total stock in the area by the end of 2018. At the close of the second half of this 2019, the PSA reports that the office real estate sector has contributed P2.22 trillion to the economy, up by 6.9 percent from the previous year. Colliers predicts a consistent 6% annual growth for the coming years as 2.88 million sqm more grade A and B office spaces are being built between 2019 and 2023.
In the country’s office market-leading districts Makati and BGC, pre-selling prices start at 180,000 pesos to 270,000 pesos per sqm. Makati alone has a weighted average lease rate of 1,286 pesos (US$24.68) per sqm. To see the full investments and vacancy rates on the office seat leasing sector, check out our detailed infographic on office space seat leasing deals here.
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