According to the Knight Frank AsiaPacific Prime Office Rental Index, Manila's prime office rents are among the Asia Pacific region's most affordable. 

Rick Santos, Chairman and Chief Executive Officer of Santos Knight Frank told WILLIAMS MEDIA, “Manila has the second fastest year-on-year rental growth in Asia Pacific. It also remains as the second most affordable with one of the lowest gross effective rents.”

At a glance:

• Strong demand for prime office rents rose by 10.6% YOY during Q2 2018.
• Manila market has the second lowest gross effective rent of PHP 1,178 (USD 22). 
• Manila saw prices increase 2.4% QOQ with robust BPO demand.
• Vacancy in Manila decreased to 4.5% from 4.9%.
• 60% of 1.47 million sqm of new office supply already pre-committed. 

Strong demand for prime office space in Metro Manila has propelled rents to rise by 10.6 per cent year-on-year (YOY) during the second quarter of 2018.

Despite the increasing rent, the market remains one of the most competitive in the region by having the second lowest gross effective rent of PHP1,178 (USD 22), according to an analysis by the country’s leading commercial real estate service provider Santos Knight Frank. 

Source: Santos Knight Frank

Manila, which was second after Sydney in YOY rental growth, saw prices increase by 2.4 per cent quarter-on-quarter (QOQ) as demand from the Business Process Outsourcing (BPO) sector remains robust.

Vacancy in Manila slimmed down to 4.5 per cent, coming from 4.9 per cent in the first quarter of the year. In total, about 60 per cent of the 1.47 million square metres of new office supply in the rest of the year is already pre-committed.

“Strong demand for office space in Manila continues. The overall office vacancy rate – currently 4.5 per cent - continues to contract, which is a positive sign.”

Santos Knight Frank forecasts that the expansion of BPOs in the Philippines will continue not only in the capital but also in the provinces as investors capitalize on favourable demographics, affordable rent, strong macroeconomic fundamentals and the strength of the dollar.

Rick Santos, Chairman & Chief Executive Officer of Santos Knight Frank, says, “The IT-BPO sector occupied nearly 80 per cent of prime office space last year, and we don’t see its growth momentum stopping anytime soon. Demand for office space in Manila remains extremely strong, reflecting the country’s solid position as one of Asia Pacific’s most important investment destinations,” said Rick Santos.

Knight Frank’s Asia-Pacific Prime Office Rental Index, which tracks the performance of prime office rents in 19 cities, recorded a 2.4 per cent increase QOQ in Q2 – almost three times that of Q1 at 0.9 per cent. Rents are expected to remain steady or see marginal increases for the rest of 2018.

Sydney, Manila, Bangkok and Bengaluru posted the highest YOY rental growth as rents in Perth, Shanghai, Phnom Penh and Kuala Lumpur all recorded a decline. Meanwhile, the most affordable cities in terms of gross effective rent were Kuala Lumpur, Manila, Perth, Phnom Penh and Bengaluru.

Santos concludes, "An unprecedented volume of 1.5 million square meters of office space will be introduced in the second half of 2018 – much of which we believe is already pre-committed.”

For more information about Manila's prime office rental rates or Knight Frank's Asia-Pacific Prime Office Rental Index, phone or email Rick Santos of Santos Knight Frank via the contact details listed below. 

Source: Santos Knight Frank

Similar to this:

Demand for luxury condominiums remains strong in Manila

Philippines to reach 1 million sqm in Manila office take-up

Infrastructure to positively impact residential demand in Manila