NordCham Philippines, in partnership with KMC Savills, Inc. and Trends and Concepts organised the real estate update and the new members welcome breakfast at the KMC Solutions Office VCorp Center Makati on June 29, 2018.
Fred Rara, Research Manager of KMC Savills, Inc. provided an update on the 1Q2018 real estate for Metro Manila focusing on office and residential sectors. The key highlights of the presentation were:
- In 1Q/2018, around 130,100 sq m of Grade A office space was added in Metro Manila, predominantly in BGC, the Bay Area and Quezon City. Net absorption was able to exceed new supply and it resulted in a lower vacancy rate of 3.8%. All submarkets experienced declining vacancies except for Quezon City, which increased to 10.4% of its office stock.
- Average rents in Metro Manila continued to expand and registered growth of 3.4% YoY –buoyed by the tightening conditions in most submarkets. However, the Bay Area remains to be a key outlier as average rents grew by 6.5% YoY. The tight conditions in Alabang also have accelerated rental growth to 3.8% YoY from 3.0% YoY in 4Q/2017.
- The estimated 723,200 sq m of GLA in the coming quarters of 2018 should increase the vacancy rate beyond the 5.0% mark by the end of the year. However, KMC Savills, Inc. believes this amount is still manageable given the market’s current performance. In addition, rental growth may not be as affected due to a changing occupier mix in select submarkets such as Bay Area and Alabang.
- The offshoring and outsourcing sector is still a significant occupier of office space. However, the Philippine Offshore Gaming Operator (POGO) sector has been a rising player, as of late. We believe the emergence of the POGO sector has eased risks of a potential glut in the office market. As such, KMC Savills, Inc. expects occupier demand to remain healthy even with another record year of new office supply.
IDr. Charisse Gail Bantiling, Head of Design and Engineering Division and Principal Designer of Trends and Concepts shared a brief overview of past aesthetics and office design through her presentation “Designing the Workplace”. Where she showcased the transition of current office design trends and highlighting its importance and benefits for the company and for its employees.
The importance of Design + Build goes beyond just “simply” designing the workplace. Its method, its meaning and its benefits directs one’s company’s success both externally and internally. It drives advantageous key factors to a company’s culture.
After the presentations, we welcomed the most recently joined 2018 NordCham members. Each member was given the opportunity to introduce themselves. The members were also presented with a NordCham membership certificate. The recently joined 2018 NordCham members are: Asiatel Outsourcing – SM Prime Holdings Inc. (Conrad Manila) – Döhle Seafront – Lars Eltvik – Miri Kaku – KSearch Asia Consulting Inc. – ManilaMed – Mediaxes Philippines Inc. – Monitor ERP Systems – NIRAS – Pacific Cross Insurance, Inc. & Pacific Cross Health Care, Inc. – PLDT Enterprise – PwC Isla Lipana & Co. – Storm Learning.
To conclude the participants had the time to network among themselves. Presentations from the speakers can be found below. View our NordCham Facebook page for more pictures of the event.