{"id":25288,"date":"2021-09-22T11:31:25","date_gmt":"2021-09-22T04:31:25","guid":{"rendered":"https:\/\/www.asiapropertyawards.com\/?p=25288"},"modified":"2021-09-22T11:31:25","modified_gmt":"2021-09-22T04:31:25","slug":"metro-manila-grade-a-office-vacancy-rate-nears-20-percent-by-next-year","status":"publish","type":"post","link":"https:\/\/www.asiapropertyawards.com\/en\/metro-manila-grade-a-office-vacancy-rate-nears-20-percent-by-next-year\/","title":{"rendered":"Metro Manila grade A office vacancy rate nears 20 percent by next year"},"content":{"rendered":"

Landlords\u00a0are forced to offer rental concessions to make tenants sign up for term renewals\u00a0<\/span>\u00a0<\/span><\/p>\n

\"\"As lockdowns\u00a0recur in the Philippines due to\u00a0spiralling\u00a0COVID-19 cases, office vacancy rates hit record highs, forcing landlords in the capital region to offer unusual rental concessions to persuade their corporate tenants to stay, reported The Phnom Penh Post<\/a>.\u00a0<\/span>\u00a0<\/span><\/p>\n

According to property consulting firm KMC Savills, about one million square\u00a0metre\u00a0of Metro Manila\u2019s grade A office space would become vacant,\u00a0considering\u00a0the increase in new office stock\u00a0but sluggish demand.\u00a0<\/span>\u00a0<\/span><\/p>\n

KMC Savills\u2019 second-quarter office property report also indicated that grade A office vacancy rate in the metropolis may surge to nearly 20 percent by next year, a record high. The\u00a0vacancy\u00a0rate in the first semester was recorded at 13 percent.\u00a0<\/span>\u00a0<\/span><\/p>\n

Michael McCullough, managing director at KMC Savills, said that this would cause a 15 to 20 percent downward pressure on rental rates.\u00a0<\/span>\u00a0<\/span><\/p>\n

\u201cOur conversations with our clients right now are \u2013 either the landlord gives me a deal I\u00a0want,\u00a0or we work from home, or I go to another building or a cheaper location,\u201d he added.<\/span>\u00a0<\/span><\/p>\n

Research also noted that non-renewals and pre-termination of leases continued to decrease demand, while office supply had jumped and was expected to continue increasing through 2024.\u00a0<\/span>\u00a0<\/span><\/p>\n

\u201cWe have observed a shift away from dense work areas to work-from-home or hub-and-spoke models all over the country. Without new tenants entering the market, there seems to be a supply-demand imbalance. This will keep leasing conditions in the occupiers\u2019\u00a0favour\u00a0in the short term, resulting in flight to quality and discounted premium space,\u201d the research said.<\/span>\u00a0<\/span><\/p>\n

More: Filipino government aims to transform communities for safe and better living<\/strong><\/a><\/p>\n

Moreover,\u00a0office vacancies\u00a0are\u00a0also partly caused by the exodus of Philippine offshore gaming operators, seeing the implementation of regulatory restrictions and lockdowns across borders.\u00a0<\/span>\u00a0<\/span><\/p>\n

In the city of Makati, which has several old buildings, McCullough noted it\u2019s the first time for office vacancy rate to hit double-digit levels at 10.7 percent in the second quarter. Central business district\u00a0Ortigas\u00a0is nearing a vacancy rate of 20 percent, trending towards 30 percent, while commercial hub Bonifacio Global City (BGC)\u00a0is a stable sub-market given its high-quality occupiers.\u00a0<\/span>\u00a0<\/span><\/p>\n

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The Property Report editors wrote this article. For more information, email:\u00a0propertyreport@propertyguru.com<\/a>.<\/em><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Landlords\u00a0are forced to offer rental concessions to make tenants sign up for term renewals\u00a0\u00a0<\/p>\n","protected":false},"author":12,"featured_media":25289,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[92,1],"tags":[127,1086,129,2348],"class_list":["post-25288","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","category-property-report","tag-manila","tag-office-space","tag-philippines","tag-rental-deals","news_country-philippines","news_author-property-report"],"acf":[],"yoast_head":"\nMetro Manila grade A office vacancy rate nears 20 percent by next year | Asia Property Awards<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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