THE OFFICE VACANCY rate in Metro Manila is projected to reach 20.5% by the end of the year, driven by the influx of new office space and the departure of Philippine offshore gaming operators (POGOs), according to property consultancy firm Colliers Philippines.
“We anticipate (office) vacancies to rise to 20.5% by the end of the year and end at flat net demand for the market mainly due to the POGOs exiting,” Colliers Director for Office Services Kevin R. Jara said during a briefing in Taguig City on Tuesday.
As of the end of the third quarter, Colliers data showed that office space vacancy rose to 18.6% from 18.3% the previous quarter due to space resulting from POGO lease terminations and non-renewal of pre-pandemic leases.
Mr. Jara said another 157,000 square meters (sq.m.) of POGO-occupied office space are expected to be vacated by the fourth quarter.
“These were the ones that we know and have officially notified their landlords that they’re not renewing their lease,” he said.
“57,000 sq.m. have already been vacated in the third quarter. That’s the immediate effect of the POGO ban,” he added.
POGOs, which are now officially known as Internet Gaming Licensees, were ordered shut down by the end of the year after the president announced a ban in July.
“Then in 2025, we are expecting 615,000 sq.m. of new office stock, mostly coming in Cubao, North Edsa, and the Bay Area,” he said.
“It’s going to be an increasingly situational scenario for office occupiers taking up new leases. It would really depend on the building occupancy, age of the building, and portfolio situation of the landlord that is leasing the space,” he said.
Submarkets with substantial POGO exposure, such as the Bay Area, are expected to see a decline in rents by yearend.
On the other hand, submarkets such as Makati, Fort Bonifacio, and Ortigas are projected to see marginal increases in rents due to declining vacancy rates.
Source: Business World Online
