The office property market has considerably regained its luster this 4th quarter of 2022 compared to the same period last year.
The Lobien Realty Group (LRG), one of the fastest rising real estate consultancy companies in the country, revealed that in the 4th quarter of 2022, total supply of office property amounted to 757,501 SQM in Metro Manila, of which, 598,518 SQM are available for lease. This means that approximately 21% of office property are leased at the prevailing average rent of 1,150 PHP/SQM across all Metro Manila Business Districts. These figures are a substantial improvement compared to the 4th quarter of 2021 when only 11% of total office property supply was leased in Metro Manila.
| District | Current Supply Until 2021 | Current Supply 2022-2028 | Total Vacancy (Current & pipeline supply) |
| Makati | 2,861,479 | 336,071 | 670,646 |
| Taguig | 2,732,002 | 274,604 | 566,612 |
| Pasig | 2,029,531 | 138,836 | 407,400 |
| Mandaluyong | 868,839 | 255,022 | |
| Quezon City | 1,784,746 | 355,499 | 682,918 |
| Alabang | 782,518 | 140,816 | 201,721 |
| Bay City | 993,571 | 117,496 | 396,960 |
| Pranaque | 398,473 | 81,113 | 265,148 |
Rent and land values remain highest in Makati and Taguig with average rental range of P800 – 1900/SQM and land valued in the P400,000 – 1,000,000/SQM range. In Pasig average rental range is P500 – 1100/SQM and land value ranges from P280,000 – 350,000/SQM. Mandaluyong’s rental range is P600 – 950/SQM and land value ranges from P120,000 – 230,000/SQM. Quezon City has an average rental range of P650 – 1,200/SQM and land value ranges from P170,000 – 230,000. Alabang’s average office property rental range is P700 – 975/SQM while land value ranges from P250,000 – 400,000/SQM. Bay City’s average rental range is P1,000 – 1,600/SQM and land value ranges from P300,000 – 500,000/SQM.
As of 1H 2022, office demand in Metro Manila is still driven by Business Process Outsourcing (BPO) comprising 45%. Online Gaming accounts for 7%, and Other Industries making up for the remaining 48% of office property demand. The significant demand of BPO companies for office spaces in the country, particularly Metro Manila, is in sync with the findings of the IT and Business Process Association of the Philippines (IBPAP) which ranked PH #1 in the world in voice BPO and #2 in non- voice, complex services.
Outside Metro Manila, IBPAP has identified 5 areas that have emerged as centers of excellence in the country when it comes to the office property market: Metro Cebu, Metro Clark, Metro Bacolod, Davao City, and Iloilo City. IBPAP also named 10 additional cities that are classified as New Wave Cities, or cities that will be the alternative investment hubs outside Metro Manila: Baguio City, Cagayan De Oro City, Dagupan City, Dasmarinas City, Dumaguete City, Lipa City, Malolos City, Naga City, Sta. Rosa City, and Taytay Rizal. These Cities promote country-wide improvement, create job opportunities and economic advancement in their region.
LRG’s office market supply analysis across all provincial business districts shows that as of the 4th quarter of 2022, total supply stands at 306,624 SQM, available supply is 251,145 SQM, total percentage of leased supply is 18%, and average rent is P630/SQM. LRG estimates that provincial office supply currently in the pipeline for the period 2022 – 2026 to be around 540,000 SQM. LRG also notes that the rise of innovative township developments will continue to attract investments and locators. 60% of these developments are located outside Metro Manila and their popularity should bring more businesses to provincial areas.
LRG is optimistic that the economic recovery of the Philippines in the new normal era will continue and hopes that 2023 will set a new standard for the continuing recovery and growth of the office property market and the entire real estate industry.