Prime office spaces in the Philippines continue to draw strong interest from the business-processing sector and multinational companies, according to real-estate services and advisory agency CBRE Philippines, despite a previous global study conducted by the same company that cited the Philippines as among the countries with rising occupancy rates.
According to a recent report conducted by CBRE Global Research, occupancy costs for premium office spaces have risen globally by 2.3 percent average annually since 2000.
The research also shows that the Philippines belongs to the top five growth markets in terms of increasing prime office rates in Southeast Asia and belongs to the top 12 out of 52 countries with the largest annual increase pegged at 9.3 percent.
The annual percentage increase is computed based on prime office occupancy costs in local currency and measure, ranked by 12-month percentage increases as of the first quarter of this year.
Despite the spike in prime office rates in the Philippines, rates remain competitive with an average of $35.90 per square feet per annum, compared to neighboring Asian cities.
The same report lists Mumbai, New Delhi, Hong Kong, Beijing, Tokyo, Shanghai, Singapore, Guangzhou, Ho Chi Minh, Brisbane and Taipei as among those offering the most expensive prime office rates.
Occupancy rates in the said cities range from $66 to $241.92 per square feet per annum.
Rick Santos, CBRE chairman, founder and chief executive officer of CBRE Philippines, said the country remains well-positioned for expanding multinational companies and increasing demand from business-process outsourcing (BPO).
Added with foreign businesses entering the Philippine market, the demand is expected to rise, according to CBRE.
Prime and grade A office space are identified as those belonging in the most populous business districts; in the Philippines. These are buildings located in Makati City and in Bonifacio Global City.
Local supply of premium office spaces is forecasted at 553,766 square meters across central business districts as real-estate developers continue to meet current and anticipated demand.
“Vacancy in prime office buildings is hovering below 1 percent, and take-up in buildings such as Zuellig is fast. With this, real-estate players are developing their fair share of office space that will address the demand posed by BPOs and multinational companies for quality space,” Santos added.
Written by: Catherine N. Pillas