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WITH
business-process outsourcing (BPO) firms gobbling up
available space in the Makati commercial and business
district and Fort Bonifacio, owners unsurprisingly
jacked up rent rates as space supply tightened,
according to JLL Leechiu Inc.
“Office
rents continue to edge upward as vacancies decline in
response to a supply shortage and continued demand,
largely driven by the expansion of BPO companies.”
Its
study shows the average rent in the Makati CBD and Fort
Bonifacio area rose 2.4 percent in the first quarter to
P716 per square meter per month. Year-on-year, the
increase represents 18.2 percent.
Another
property broker firm, CB Richard Ellis (CBRE), noted the
Philippines is nowhere near the top 50 most expensive
office markets worldwide that is led by London, where
annual rents are pegged at $299.54 for every square
feet. That’s P135,494 for every square meter in current
exchange rates.
The
Philippines is catching up, however, ranking 9th in the
top 10 markets with growing occupancy costs as of this
month.
Worldwide, 88 percent of the 173 office markets
monitored posted higher occupancy costs, CBRE said in a
statement released Wednesday.
Angela
Padilla, head of commercial at JLL Leechiu, said the
space availability and rising rent “have forced several
companies looking to expand to consider secondary
locations.”
“Net
absorption over the quarter alone was 24,820 sq m,
outstripping the 19,240 sq m of new supply that entered
the market over the same period.”
Average
vacancy rate of office space in the Makati CBD and Fort
Bonifacio tightened further from 4.1 percent in January
to 3.5 percent in April.
Maria
Katherine Marcelo, head of research and consultancy at
JLL Leechiu, said that “a large amount of new office
space planned for completion in 2008 will ease the
undersupply in the Makati CBD and Fort Bonifacio office
market.”
Its
study indicates that another 254,000 sq m of office
space from eight office projects is planned for
completion over the final three quarters, the highest
ever annual completion level in the Makati CBD and Fort
Bonifacio office markets.
“With
increased availability of new supply, vacancies will
rise but from a very low base. In addition, pent-up
demand, particularly from BPO companies, will likely
absorb new supply quickly,” said Padilla. |
