By Arra B. Francia, Reporter
THE MANILA BAY Area is expected to grow its total office stock by 130% by 2021, as tenants look for alternative locations given the lack of office spaces in Metro Manila’s two leading business districts.
This is according to real estate consultancy firm Colliers International Philippines, which noted that construction activities at the Manila Bay Area will result in an increase in office stock to 930,000 square meters (sq.m.) in the next three years, from 400,900 sq.m. at the end of 2017.
“At present, office space vacancies in Makati Central Business District (CBD) and Fort Bonifacio hover between 2% and 3%. This compels locators to look for alternative locations such as the Manila Bay Area,” Colliers Philippines Director for Landlord Representation Andrew Gomez was quoted as saying in a statement.
Colliers said the demand was coming from both business process outsourcing (BPO) and non-BPO firms, which look to take advantage of the Manila Bay Area’s proximity to the Ninoy Aquino International Airport. The rising business district is also easily accessible to other business districts in the metropolis.
Around 20% of total transactions in Metro Manila came from the Bay Area in the first half of 2018 alone, making it one of the primary drivers for the metro’s office market.
With the increased demand for spaces in the area and low vacancy at 2%, prices at the Manila Bay Area have shot up by eight to 10% during the second quarter, hovering between P700 to P1,500 per square meter. This is comparable to rental rates in the Makati CBD and Fort Bonifacio, which commanded rates of P800-P1,800 and P850-P1,500 per sq.m., respectively.
Illustrative of the demand for offices in the Manila Bay Area is Federal Land, Inc.’s iMET BPO building inside the Metro Park development. Colliers noted that iMET is now 100% occupied, with an outsourcing firm, a logistics company, and a state-led firm as some of its tenants.
Newly listed company D.M. Wenceslao & Associates, Inc. also has 352,890 sq.m. worth of leasable or saleable properties in its mixed-used estate in the Bay Area called Aseana City. The company is spending P11 billion until 2020 for the development of more properties in the area, banking on rising demand not only for office spaces but also residential and retail projects.
DoubleDragon Properties Corp. also recently unveiled its office project in the Bay Area called DD Meridian Park, providing 130,000 sq.m. of leasable space through the first of the development’s four phases. The company was able to lease 97% of the building at the time of its launch last May.