Rents of Prime and Grade A office buildings across the major business districts in Manila are rising due to strong demand for both business process outsourcing offices and traditional offices, based on the second quarter report of CBRE Philippines.
In the business districts of Makati and Ortigas wherein traditional office buildings are concentrated, continued demand by multinational and local companies is supporting the growth in rental levels.
Average office rent in Makati increased by 2.65 percent to P809 per square meter per month compared to the previous quarter while Ortigas improved to P554 per square meter per month.
The rise in office rents is even more apparent in the BPO dominant business districts of Alabang and Quezon City.
Average office rent in Alabang grew by 6.1 percent from the previous quarter to P501 per square meter per month. On the other hand, average rent in Quezon City increased by 3.1 percent to Php516 per square meter per month.
Fort Bonifacio rates (BGC and McKinley) rose as well with average rents now at Php698 per square meter per month. Despite the upward trend in rents, vacancy rates across the major business districts were kept below the 5 percent level.
“Office vacancy rates declined even with the growth in rental levels because of supply pressures,” said Rick Santos, CEO and Chairman of CBRE Philippines, adding that pre-commitments are also active for offices which are still in the pipeline.
The sharpest decline in vacancy rates is recorded in the Fort Bonifacio district which is now at 1.48 percent. On the other hand, vacancy rate in Alabang is at 3.08 percent and 2.79 percent in Quezon City.
In Ortigas, vacancy rate is at 2.96 percent while in Makati, vacancy rate is at 4.6 percent.