THE information technology-business process management (IT-BPM) sector continued to fuel demand for office spaces in the first quarter, amid the retention of tax perks for outsourcing companies.
A first-quarter office market report by real estate consultancy firm Pronove Tai International showed that IT-BPM accounted for more than half of the actual take-up for office spaces in the January to March period. This is equivalent to around 135,000 square meters (sq.m.) of office spaces.
“They came in with a strong start despite the tax issues that brought about uncertainties in 2017. With the TRAIN (Tax Reform for Acceleration and Inclusion) implemented in January and the tax incentives retained, we have seen that uncertainty addressed for the IT-BPM sector,” Pronove Tai Chief Executive Officer Monique Cornelio-Pronove said in a media briefing in Makati City on Wednesday.
Majority of the transactions from IT-BPM firms were located in Taguig City, Muntinlupa City, and the Bay Area.
Also driving the demand during the first quarter were traditional offices, accounting for 30% or 79,000 sq.m. of the actual take-up for the period.
Philippine offshore gaming operators (POGOs), meanwhile, occupied an additional 48,000 sq.m. in the first quarter, or 19% of the actual take-up, locating primarily in the Bay Area, Pasig City, and Makati City.
Around 250,000 sq.m. of office spaces were added to the Metro Manila office supply in the first quarter of 2018, coming mostly from Taguig City, Quezon City, and the Bay Area.
“This is driven by the letters of no objection presented by LGUs (local government units),” Ms. Cornelio-Pronove said.
Letters of no objection are documents presented by LGUs to gaming firms in order to allow them to operate in a specific area. Pronove Tai noted earlier this year that demand from POGOs may slow down given tighter government restrictions against online gaming.
Meanwhile, the real estate services firm reported that around 250,000 sq.m. of supply was added to the Metro Manila office stock in the January to March period, bringing the total office stock in the metro to 10 million. This marks a 3% increase quarter on quarter.
Majority of the new office supply are located in Taguig City, followed by Quezon City and Mandaluyong City.
The company noted that the Bay Area — touted as the second-fastest growing district for last two years — recorded zero growth for the quarter. Replacing its growth momentum was Quezon City, which logged an additional 84,000-sq.m. supply for the period.
Vacancy rates were steady at 5%, with Quezon City posting the highest vacancy at 13%, followed by Mandaluyong City and Ortigas Center with 12% and 6%, respectively. — Arra B. Francia
