Metro Manila office space rents continue to rise in Q2 -- CBRE

Posted on August 18, 2011

RENTS OF prime and grade-A office buildings across the major business districts in Metro Manila are rising as strong corporate expansionary demand drives leasing requirements for both business process outsourcing (BPO) and traditional offices, consultancy CBRE Philippines said in a statement yesterday.

“We believe this is just the start of the projected up-cycle for the Philippine property market as determined by real demand and strong macroeconomic fundamentals,” said Rick M. Santos, chairman and chief executive of CBRE Philippines.

In the business districts of Makati and Ortigas wherein traditional office buildings are concentrated, continued demand by multinational and local companies is reportedly supporting the growth in rental levels.

Average monthly office rent in Makati increased by 2.65% in the second quarter from the January to March period to P809 per square meter (sq. m.) while that in Ortigas improved to P554 per sq. m.
The rise in office rents is even more apparent in the BPO dominant business districts of Alabang and Quezon City.

Average monthly office rent in Alabang grew by 6.1% from the previous quarter to P501 per sq. m. On the other hand, average rent in Quezon City increased by 3.1% to P516 per sq. m.

Fort Bonifacio rates, particularly those in Bonifacio Global City and Mckinley, inched up as well and average monthly rent is now at P698 per sq. m.

Despite the upward trend in rents, vacancy rates across the major business districts were kept below the 5% level.

“Office vacancy rates declined even with the growth in rental levels because of supply pressures,” Mr. Santos said, adding that pre-commitments are also active for offices which are still in the pipeline.

The sharpest decline in vacancy rates is recorded in the Fort Bonifacio district which is now at 1.48%.

Vacancy rate in Alabang is at 3.08% and 2.79% in Quezon City.

In Ortigas, vacancy rate is at 2.96% while in Makati, vacancy rate is at 4.6%.