QUEZON CITY is expected to be the fastest growing property district this year, according to Pronove Tai International Property Consultants.
Pronove Tai expects total office stock to grow by 10% to 11.7 million square meters (sq.m.) this year, from 10.6 million sq.m. as of end-2018.
“There will be 12 million square meters (sq.m.) of space that will be completed (in Metro Manila), and Quezon City will have the most supply, and that will be the fastest growing district at 31% year-on-year in stock,” Monique Cornelio-Pronove, chief executive officer of Pronove Tai International Property Consultants, said in a media briefing on January 9.
For office supply, Ms. Pronove said 1.04 million sq.m. or 45 new buildings will be added in 2019.
“Quezon City will deliver the highest supply at 33%,” she added.
Among the developments in Quezon City expected to be completed this year are SM Development Corp.’s (SMDC) SM City Fairview Tower 4 and 5 and SM North EDSA Tower 1 and 2; Eton Properties Philippines, Inc.’s Cyberpod Centris Five; Robinsons Land Corp.’s (RLC) Giga Tower and Magnolia; Araneta Properties, Inc.’s Cyberpark Tower 2; Filinvest Land Inc.’s (FLI) Studio 7; and Megaworld Corp’s Eastwood Global Plaza.
Nearly a quarter or 264,000 sq.m. of the 2019 supply has already been pre-leased. However, Pronove Tai noted the pre-leasing rate slowed to 25% in 2019, from 43% in 2018.
Philippine Offshore Gaming Operators (POGOs) accounted for 45% of the total pre-leasing transactions, while information technology and business process management (IT-BPM) companies accounted for 36%.
The Bay Area and Makati City remained the most preferred destinations for POGOs, but some firms have pre-leased spaces in Quezon City and Parañaque.
“The good thing about what’s happening, while you have a 13% vacancy in Quezon City, overall the vacancy is just 4%, and your main competitors, which is at least for POGOs does not have space that will be completed. Makati, also, is very expensive,” Ms. Pronove told BusinessWorld.
According to the firm’s report, Quezon City had the highest vacancy recorded in 2018 at 13%, versus the Manila Bay area, which caters mostly to POGOs, at 0.4%.
Average monthly office rent in Makati City grew by 8% to P1,570 per sq.m. in 2018, the most expensive among central business districts in Metro Manila. The Bay Area saw the biggest increase in monthly rent at 19% to P960 per sq.m.
To compare, the average monthly office rent in Quezon City inched up by 1% to P850 sq.m. in 2018.
Ms. Pronove noted that these factors will contribute to Quezon City’s attractiveness to companies.
“So, you have that window being in Quezon City. You can become like what happened to the Bay Area, where before it was the fastest growing district. They have a lot of space, but because they embraced the POGOs… they were able to attract a lot of POGOs… they were able to decrease their vacancy,” she noted. — Vincent Mariel P. Galang