Despite being due for redevelopment, Makati's central business district (CBD) remains a top choice for office tenants, surpassing the newer Fort Bonifacio area, according to Colliers Philippines' third-quarter briefing polls.
"The business hub continues to attract multinational corporations and large outsourcing firms," Colliers said. "Makati CBD is ripe for redevelopment, and landlords should capitalize on demand from companies looking to locate and expand in the country's primary financial district."
Nearly 40 percent of survey respondents chose Makati CBD for their relocation or expansion plans. Fort Bonifacio, considered an extension of Makati CBD, followed with 25 percent. Other preferred locations include the Bay Area (14 percent), Alabang (14 percent), and Ortigas CBD (10 percent).
Colliers' data for the first nine months of 2024 showed that relocations accounted for approximately 34 percent of office transactions, with many companies prioritizing "flight-to-quality" or value-driven strategies.
Demand remains strong across various sectors. During the first nine months of 2024, Colliers observed leases from government agencies, banking and financial service providers, and IT companies in Makati CBD, the Bay Area, and Fort Bonifacio.
"We anticipate continued office space uptake in these locations due to the availability of new, high-quality office spaces offered at discounts ranging from three percent to 30 percent compared to pre-pandemic rates," Colliers noted.
The Bay Area, in particular, has attracted government agencies with its newer and larger office spaces, offering a seven percent to 19 percent spread between published and actual rental rates as of the end of September 2024.
"Companies aiming to reduce capital expenditures should also consider available fitted spaces," Colliers Philippines advised. "As of the end of the third quarter of 2024, Metro Manila had about 439,000 square meters of available fitted office space, with Fort Bonifacio and the Bay Area accounting for 40 percent of the supply."
Turning to the residential market, Colliers suggests that property firms with significant unsold ready-for-occupancy (RFO) units should implement attractive and innovative promotions to stimulate demand, given the persistent high interest and mortgage rates.
Metro Manila developers should also enhance their amenity offerings to revitalize interest in the pre-selling market, particularly in the struggling mid-income segment.
Colliers' data reveals that unsold inventory in Metro Manila (including pre-selling and RFO units) reached 75,300 units in the third quarter of 2024.
Selling all these unsold condominium units is estimated to take approximately 5.8 years—significantly longer than the pre-pandemic period (2017 to 2019), when the remaining inventory life (RIL) ranged from 0.9 to 1.1 years.
Of the total unsold inventory, 27,200 units are RFO, valued at P154.4 billion.