SUPPLY

A slowdown in construction has pushed back the completion dates for office buildings across Metro Manila. This translates to a significant bump in completions anticipated for 2024. The market is bracing for a substantial influx of brand-new office space – a staggering 634,000 sq m. Notably, Bonifacio Global City (BGC) is set to receive the largest portion of this influx, accounting for nearly a third (30%) of the new office space. The Bay Area follows closely behind, expected to absorb 22% of the new completions. This influx could significantly impact vacancy rates, particularly in districts with a high volume of current office space still available, potentially creating a tenant’s market and putting downward pressure on lease rates.

TRANSACTIONS

Metro Manila’s office space transactions reached a significant 182,000 sq m in the first quarter of 2024. Among the submarkets, Bay Area, BGC, and C5 Corridor emerged as the frontrunners with the highest transaction volume. While sustained growth in BGC was expected, the strong activity in Bay Area and C5 Corridor presents a surprising new trend. This uptick in these submarkets can likely be attributed to their proximity and accessibility to densely populated areas outside Metro Manila. For instance, Bay Area’s convenient location attracts tenants seeking a talent pool from Cavite, while C5 Corridor’s easy access benefits those looking for employees in Rizal. This trend highlights a potential shift in tenant preferences towards submarkets that offer a strategic talent acquisition advantage.