Estimated new office demand of 300,000 square meters is expected to boost total office space requirement to 600,000 sqm this year with the business process outsourcing (BPO) sector spurring the growth.
Leechiu Property Consultants, which is known for its optimistic property projections, said that real estate industry is clearly on the road to recovery.
The property consultancy firm placed the office demand in the first half of 2021 at 291,000, or 75 percent of the 2020 take-up.
Boosted by 330,000 sqm of live requirements likely to be concluded by year-end, the forecast is that 2021’s full-year demand will outpace 2020’s 389,000 sqm.
Mikko Barranda, LPC director, said that office take-up could reach the 500,000-600,000 level by year-end. The IT-BPM industry alone is seeking to occupy by this year 190,000 sqm of office space or 58% of the live requirements. Traditional firms like those in e-commerce and logistics which grew during the pandemic posted 122,000 or 37 percent while POGO firms are seeking 17,000 or 5 percent.
Renewed POGO interest in the office market “tells us their tax concerns have been clarified by SB 2232.” Classified as urgent and now on final reading, the Senate Bill is due to be signed into law soon.
Moreover, POGO contractions reported at 118,000 sqm in 1Q 2021 retreated to 59,000 sqm in 2Q 2021 when discussions on SB 2232 commenced.
As a result, POGOs may expand again as soon as travel bans are lifted, he said. Meanwhile, IT-BPMs are driving the office sector with 44% of demand in 1H 2021. Economic stability in the West and the sustained rollout of the vaccines in the Philippines have prompted their return.
They will be on expansion mode up to year-end, said Barranda. Property pricesin prime masterplanned communities have similarly stayed strong despite 15 months of the pandemic, observed Alvin Magat, LPC director. In BGC, accommodation value (AV or lot price per sqm. divided by the Floor Area Ratio or FAR) is at an all-time high of over P100,000. It is P51,000 in Arca South. Prices in gated luxury villages have held up with lots in Forbes Park and Dasmarinas Village in Makati still going for P420,000-P450,000 per sqm. while they have increased by 17 percent to P175,000 at Ayala Alabang Village.