Demand for leased office space in the third quarter fell 16 percent to 215,000 square meters from 255,000 square meters in the year earlier period, according to Leechiu Property Consultant Inc.
Year-to-date demand, however, remains strong, totaling 900,000 square meters—an 11 percent increase over last year’s 809,000 square meters—thanks to robust transactions in the first half.
Mikko Barranda, director for commercial leasing, said Philippine offshore gaming operators or POGOs now account for eight percent of demand, in sharp contrast to their 45 percent share pre-COVID.
Nevertheless, the property consultants said there remains a healthy pipeline of office spaces going forward, with many companies eager to finalize leases by year-end.
Looking ahead, the annual office supply is projected to halve next year, a development that could drive down vacancy rates.
Barranda anticipates office space vacancies shifting from a steady flatline to growth estimated at around 17 to 18 percent as only around half of the newly completed office spaces enter the market.
Some 3.1 million square meters of space remain unoccupied of the total 18.4 million square meters available, the property consultants said.
Also, the IT-BPM sector continues to lead office space demand, representing 55 percent of live requirements, even as traditional sectors, primarily government offices, are on the rise.
Major areas like Bonifacio Global City and Makati remain top choices for tenants, as the market adapts to evolving needs post-pandemic, the property consultants said.
