Year-end office space demand seen 800k-1M sqm

 

YEAR-END office space demand in the Philippines is seen between 800,000 and 1 million square meters (sqm) despite the effects of the coronavirus disease 2019 (Covid-19) pandemic, said Leechiu Property Consultants (LPC) chief David Leechiu.

In an online media briefing on Thursday, Leechiu said the demand for office space in the first quarter of 2020 was recorded at 157,000 sqm, 47-percent lower than its figure year-on-year.

However, he emphasized that there are 636,000 sqm of live requirements being transacted today and expects the demand to increase more by 25 percent.

Many of the transactions are eyed to be closed by the beginning of the second half of the year, thus their optimism on this year’s total demand to range from 800,000 to 1 million sqm.

Leechiu said the demand would be mostly fueled by the “strong comeback” of the Philippine offshore gaming operators and the “resilient demand” of the information
technology and business process management industry.

He also said multinational corporations are likely to diversify out of China, which is seen to benefit the country.

Likewise, office space supply, according to Leechiu, is expected to decline as delays in construction are expected to cause a slowdown amid the enhanced community quarantine.

“We are recalculating 2020 Philippine supply and reducing it by 44 percent to 842,000 sqm from our initial 1.498 million sqm,” the LPC chief was quoted as saying.

As for the issue of experiencing an oversupply, Leechiu said the pandemic would likely “flatten the supply curve and offset the slowdown in office transactions.”

“This would result by the end of 2020 in manageable vacancy levels and reduce the threat of a glut in office space,” he added.

Source: https://www.manilatimes.net/2020/04/07/business/real-estate-and-property/year-end-office-space-demand-seen-800k-1m-sqm/710523/