‘Metro Manila office vacancy rate highest in over a decade’

by Catherine Talavera (The Philippine Star), 30 Oct 2020

MANILA, Philippines — Vacancy in the Metro Manila office market is seen to post its highest level since the global financial crisis by the end of the year, driven by Philippine offshore gaming operators (POGOs) vacating spaces and business process outsourcing (BPO) firms rationalizing their office requirements.

In its quarterly property report, Colliers International Philippines reported that vacancy in Metro Manila in the nine months of 2020 reached 7.1 percent, significantly higher than the 4.3 percent vacancy in the end of 2019.

“Colliers now projects 2020 vacancy to reach 8.3 percent, the highest since the 8.6 percent posted in 2009, during the global financial crisis,”the property consultancy said.

Net take-up of office spaces in the nine-month period dropped 120 percent –113,000 square meters compared to the 606,000 sqm take-up in the same period last year.

Colliers said the figure is also higher than the -30,000 sqm take-up in the second quarter of 2009 during the GFC.

A negative net take-up means that vacated office spaces outstripped absorbed or occupied offices during the period.

In the third quarter alone, net take-up registered at −191,300 sqm.

The negative take-up can be attributed to POGOs vacating office spaces as the sector returned a total of 154,000 sqm of office space as of the third quarter.

Of the spaces vacated by POGOs, Quezon City accounted for 40 percent or 61,000 sqm.

This was followed by the Bay Area with 41,000 sqm or 27 percent of the total. Alabang accounted for 13 percent at 20,000 sqm, Makati CBD accounted for eight percent at 13,000 sqm, while Ortigas had a seven percent share at 10,000 sqm.