Collier Philippines’ Kevin Jara Talks About the Office Space Market in Real Estate
“Here in Manila, if you think about your real estate strategy, it’s not enough anymore to think about a relocation option for additional office space,” said Kevin Jara, Associate Director of Tenant Representation in Colliers Philippines.
His talk which was part of Philippine Real Estate Outlook for 2023 organized by The Executive Centre Group focused on office market updates, as well as the emergence of flexible workspaces post-pandemic.
“We’ve seen the Philippine market turn the corner in terms of transaction activity and net office space demand,” explained Jara. Things are actually looking up for this branch of the real estate sector, as the downward trend of office space demand which translated to 41% vacancy in 2020 went down to 12% when 2022 ended. The biggest benefit of a flexible workspace is that it caters to any type of business, big or small.
However, the vacancy is expected to rise as soon as new buildings are completed, many which broke ground pre-pandemic. Usually, 405 years is the completion timeline for a new high-rise structure. Overall, last year’s jump from 2021 is a total of 43% office space demand, which translates to 603,000 sqm. office space.
In 2022, 27% of total transactions are in provincial areas. By this, it translates to 222,000 sqm. of occupied office space, with 60% of this in Cebu. Davao has about 39,000 sqm. of total office space, with just around 25,000 sqm. office space up for grabs.
Health Information Management Section (HIMS) are setting up and expanding in the country. “You don’t have to be a medically-trained person for you to be working in a healthcare BPO due to the number or variety of roles there,” said Jara. He illustrated the scenario wherein all the current vacancies for on-site medical transcriptionists are filled, roughly numbering around 7,500, and this translates to 45,000 sqm. office space.
Other speakers present were Claro Cordero Jr. (Director/Head of Research, Consulting and Advisory Services, Cushman & Wakefield) and Harry Salinkow (Director, Investment Management, The Executive Centre)
*Cover Photo/Thumbnail Photo from The Executive Center