Real Estate Demand in RP Rises as APAC Inches Past US in Global Market
Official press release.
The demand for office space in Metro Manila continued to grow significantly in 2016 leading up to 2017.
In the research carried out by JLL, the country's leading property consultant, the driving force behind the need for space and the rise in property values, is the increased entry and activity of the BPO and O&O industries. Based on JLL research, these industries accounted for 46% of office space demand followed by the banking and IT sectors which each accounted for 12% of leased space.
In terms of location, BGC has been the go-to site for lessees, accounting for 45%. Makati takes the next biggest bulk with 21%, followed by Alabang at 14%. Quezon City, meanwhile takes a 12% share of the demand while Ortigas is at 7%.
Makati, however, remains the most costly in terms of rent. From 2016 to 2017, lease rates at the said commercial business district increased to between Php1,200 and Php1,500 per square meter- or an increase of 12%. Rent in BGC also rose by 12%, as lease rates in BGC now average between Php800 to Php1,200 per square meter.
Despite the impressive numbers, Metro Manila, over-all, still remains the 10th lowest in rental value in Asia Pacific- way behind Hong Kong, Beijing and Shanghai. The Metro also lags behind Jakarta, Delhi and Hanoi.
JLL's Chief Executive Officer for Asia-Pacific (APAC) Anthony Couse says investing in Manila is not seen to slow down anytime soon because APAC, which is now considered as the engine of global growth, has now surpassed the US in the world market. In fact, the Philippines even has the best total returns after Australia.
Couse explains that several factors are helping push the Philippine market up: the improved relations between the Philippines and China; the stronger value of the dollar vis-à-vis the peso; the unaffected operations of the BPO industry despite U.S. President Donald Trump's "America First" stance; and the low attrition and labor costs in the Philippines which are around 12% of those in the US.