Metro Manila’s office market is expected to witness a yearly rental increase of 6% from 2019 to 2021 due to a tight supply of PEZA-accredited zones amid a ban on the development of new economic zones, said real estate services provider Colliers International Philippines. The firm said the figure is higher than their original projection of 5% in the first quarter. Colliers said the moratorium on the processing of new ecozones is expected to discourage outsourcing companies from expanding, but there will still be a demand for office space from traditional occupiers such as legal, engineering and construction companies, government agMetro Manila Office Rents To Rise 6% Yearly Amid Ecozone Banencies, flexible workspace operators and offshore gaming firms.
Office space take-up by outsourcing firms reached 199,000 square meters in the first half of the year, down 45% from the 361,000 square meters in the same period last year. The reduced take-up was due to slower approval of ecozone applications and concerns surrounding the proposed second package of the comprehensive tax reform program. Colliers urged developers with pending ecozone applications to seek immediate approval to address the dwindling office supply in the capital. It also encouraged outsourcing firms to consider Iloilo, Cebu and Davao.