IT-BPM sector drives Metro Manila office space demand in 2024
MANILA, PHILIPPINES — The office space demand in Metro Manila is expected to surpass 300,000 square meters (sq.m.) in 2024, driven by the expanding Information Technology and Business Process Management (IT-BPM) sector.
Cushman & Wakefield’s Asia Pacific Office Outlook 2024 report highlights this growth, a notable recovery from the 59,000 sqm net absorption decline in 2022.
The firm projects a steady increase in demand, as evidenced by 2023’s rebound to 340,000 sq.m., a 70% jump from the previous year. The firm forecasts an average annual net absorption of 366,000 sq.m. from 2024 to 2027.
However, the market faces challenges, including persistent high vacancy rates due to global companies’ ongoing adoption of hybrid work models. Upcoming legislation enabling remote work for local IT-BPM firms could also further affect Metro Manila’s leasing market.
On the supply front, Cushman & Wakefield predicts a yearly average new supply of 180,000 sq.m. over the next five years, a 25% decrease from earlier projections and much lower than the pre-pandemic average.
The property services firm added that developers are actively planning for long-term growth, with several new projects lined up for completion beyond 2027, indicating confidence in the market’s sustained demand.
Metro Manila’s office rents are also expected to rise, with an average annual growth of 3.2% anticipated until 2027.
This positive forecast, spearheaded by the IT-BPM sector, points to positive signs while acknowledging ongoing vacancy and supply challenges.
