Philippines ranks third globally in office space occupancy
MANILA, PHILIPPINES — The Philippines has positioned itself as a global leader in office space occupancy, ranking third worldwide in the first half of the year. This achievement, reported by real estate consultancy firm PRIME Philippines, highlights the country’s office space occupancy rate averaging an impressive 80%.
This figure is only surpassed by Singapore’s 88% and India’s 85%, and it significantly exceeds the global average of 70%, as well as the United States’ 62% and Europe’s 60%.
BPO industry fuels occupancy growth
Cholo Florencio, Executive Vice President of PRIME Philippines, credits the strong occupancy rate to the thriving business process outsourcing (BPO) industry, which has experienced an annual growth rate of 7% to 8%.
The increasing demand from government sectors and the widespread adoption of flexible working arrangements have also contributed to this growth.
Metro Manila’s occupancy rates soar
In Metro Manila, the office space occupancy rate climbed to 85%, a slight increase from the previous year’s 84%. Florencio expressed optimism about maintaining this momentum despite the challenges posed by the exit of online gaming companies.
“I think we will be able to sustain our momentum in terms of adding a bit of occupancy levels,” he stated during a briefing.
Impact of POGO ban on office market
The recent ban on Philippine Offshore Gaming Operators (POGOs), announced by President Ferdinand “Bongbong” Marcos Jr. during his State of the Nation Address, presents a challenge to the office space market.
The Department of Finance’s cost-benefit analysis indicated that the POGO industry had a net cost of Php99.52 billion (US$1.77 billion) to the economy in 2021.
Florencio noted a decline in office space takeup from POGOs since the COVID-19 pandemic, with vacancies expected to rise following the ban.
“There has been a very sharp decline ever since the pandemic,” Florencio remarked, highlighting the negative impact of criminal activities associated with POGOs. He emphasized the need for developers to attract new tenants by offering enhanced amenities and benefits.
Sustaining demand with co-working spaces
Despite these challenges, Florencio remains confident in the country’s ability to maintain high occupancy rates.
The BPO sector continues to be a major economic driver, and government agencies have increased their demand for office space due to ongoing headquarters rehabilitation projects. Florencio also pointed out the growing interest in co-working facilities, which are becoming an integral part of the office sector.
“Demand can also translate to co-working facilities, so it’s not just the traditional office space you’re seeing right now,” he added, underscoring the evolving landscape of office space usage in the Philippines.
