THE BAY AREA, a business hub straddling Pasay City and Parañaque City, has regained its position as the fastest-growing office district in Metro Manila, recording a 10% growth in stock during the second quarter of the year.
Monique Cornelio-Pronove, chief executive officer of Pronove Tai International Property Consultants, said in a recent media briefing that the Bay Area had an additional office supply of 77,000 square meters (sq. m.) from April to June, bringing the district’s total stock to 830,000 sq.m., which accounts for 8% of the total 10.2 million sq.m. office stock in Metro Manila.
“[The] Bay Area did not have any supply last quarter, and it was at the bottom… but for this quarter, Bay Area went up again as the fastest-growing district,” Ms. Cornelio-Pronove said.
Muntinlupa City also posted a notable growth of 8% or 39,000 sq.m., expanding its total office stock to 551,000 sq.m. The district emerged as the second fastest-growing district in the same period.
Even though Makati City posted only a 1% growth in stock, it remained the largest office district in Metro Manila with a total stock of 3.3 million sq.m. or 33% of the total office stock in the region.
Approximately 194,000 sq.m. of office completions were recorded by Pronove Tai in the second quarter, a decrease of 22% quarter on quarter (QoQ). While this marked a 100% delivery rate as projected for the quarter, the decrease in supply resulted in vacancy rates dropping from 5% to 4% QoQ.
“What happens if you have lower supply and yet you still have strong demand or strong take-up, your vacancy will go down,” Ms. Cornelio-Pronove said. “Our vacancy last quarter was 5%, we’ve actually gone down to 4%. And I’ve always been saying that 5% would be a healthy level already to provide space for those (companies) that growing.”
Mandaluyong City and Quezon City recorded the highest vacancy rates at 12% and 10%, respectively, while all the other districts recorded unhealthy levels below 5%. Muntinlupa City was at the lowest at 1%, Makati City remained tight at 2%, and Bay Area logged in 3%.
Meanwhile, Pronove Tai also reported that the actual take-up of office spaces in Metro Manila in the second quarter slowed down by 18% to 214,000 sq.m. from the 262,000 sq.m. in the previous quarter.
Of the actual take-up, traditional offices accounted for the biggest share at 43% or 92,000 sq.m., while the information technology-business process management (IT-BPM) sector and Philippine offshore gaming operators (POGOs) trailed at 32% (69,000 sq.m.) and 24% (51,000 sq.m.), respectively.
Ms. Cornelio-Pronove noted that POGOs are a huge market, and their preferred locations are the Bay Area and Makati City.
“We currently have 446,000 sq.m. existing office spaces taken up by POGOs in Metro Manila. The Bay Area and the Makati area continue to be the favorite destinations of the POGOs. If they have their choice they want to be in Makati. But because the supply in Makati is limited, then Bay Area has opened up to them as well,” she said.