OFFICE rent in Manila is expected to rise by 4 percent next year, a slower growth than in previous years due to the larger supply of office space in 2016.
Rates, however, will bounce back in 2017 and 2018, according to Chris Fossick, managing director at JLL for Singapore and Southeast Asia.
He said Manila office rent has had several years of strong demand and lack of supply, pushing up rental rates by 5 percent to 6 percent.
The rental growth has been at 6 percent for 2013 and 2014, and a 5-percent hike is expected by end-2015.
However, with an increased supply of 20 percent, or some 870,000 square meters (sq m) in 2016, a slower growth of 4 percent in rental rate is in the offing.
In 2015 signs of the slowdown were already showing: 74 percent of the total 748,700 sq m of office space made available in 2015 was leased, compared to 92 percent from the year before.
Even with the slowdown, the JLL executive sees a correction in the trend for 2017 up to 2018, as there will be a foreseen pent-up demand, complemented by lower supply in office space.
Office demand is still bolstered by the business-process outsourcing sector to be boosted by new areas such as the financial sector.