The need for office space in Metro Manila is expected to remain strong due to demand from the outsourcing and offshoring market. Global real estate services firm, KMC Savills, said a record 263,400 sqm of new office space was completed in Q2 of 2017, but vacancy rates remained low at 4.2%. The figure was higher than initial estimates for the year. Bonifacio Global City accounted for over half of the new supply, with 3.8% due to strong demand in the area. Vacancy rates in the Alabang and Bay Area markets also remained in single digits. About 186,500 sqm of new office space is expected to be completed by the end of 2017, but single-digit vacancy rates continue because of an expected strong and steady net take-up of office space. However, rental performance may experience pressure in the next months due to new supply. The BPO industry’s quick growth is expected to absorb new building completions with tempered rental rates to keep vacancy rates reasonable and to facilitate demand.
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