Office space demand near CBDs up 40%

Demand for office spaces, residential units, and warehouses near central business districts (CBDs) in the Philippines went up 40 percent in the first quarter this compared with the last quarter of 2021.

Latest data from Lamudi, an e-based real estate search portal, attributed the rebound in condo demand in CBDs due to order of Philippine Economic Zoe Authority (PEZA) for its registered business enterprises (RBEs) to return 70 percent of their operations to physical offices starting April 1. PEZA RBEs were allowed to operate 90 percent work-from-home (WFH) and 10 percent onsite during the pandemic or until March 31 this year.

As pre-pandemic activities resume, the return to the office seems to be the next big move towards normalcy. The latest Lamudi data reveals significant trends in commercial property demand, with leads for warehouses, offices and buildings for rent showing double-digit growth from 4Q 2021 to 1Q 2022.

In Makati, the financial capital of the country, the P100K to P200K price range attracted the largest share of leads for commercial properties to rent in Lamudi in 1Q 2022. Offices followed by buildings and retail were the most popular commercial subcategories on Lamudi in the same period.

At the same time, demand for residential rentals in Makati grew significantly with leads increasing by roughly 40 percent from 4Q 2021 to 1Q 2022. Inquiries from property seekers outside of the metro increased during this period, with seekers from Cebu City and Calamba joining Imus and Angeles as part of the top sources of leads for the city.

In Pasig, the city hosting Ortigas Center, the leads for commercial properties saw a double-digit increase in percentage from 4Q 2021 to 1Q 2022.

In terms of the most popular price segment for commercial properties for rent, Lamudi said the P100,000 to P200,000 generated the most leads in the first quarter of this year. In the same period, offices overtook warehouses as the most searched subcategory for commercial properties in the city. This coincides with an uptick in inquiries for residential rentals, which shot up by 28 percent quarter-on-quarter in 1Q 2022.

The leads for commercial properties in Quezon City had a double-digit increase in percentage from 4Q 2021 to 1Q 2022, with commercial rental properties priced P100K to 200K garnering the most leads.

For two years, WFH has become the norm amid the pandemic. However, with the favorable trends now, the number of coronavirus cases declining and lockdown restrictions easing, more businesses are urging workers to come back to the workplace.

“While this offers promising opportunities for real estate players, it also presents challenges, primarily in making commercial spaces appealing to employees who have become used to working from home,” Lamudi CEO Kenneth Stern said.

Stern mentioned that it’s essential to have value-adding amenities that promote work-life balance. These include daycare facilities that allow working mothers to bring their children to the workplace, and fitness centers that make it easy for professionals to embrace an active lifestyle.