We're excited about 2016, going into our 7th year of serving Philippine real estate needs.  The 2016 Outlook overall is positive but there are some uncertainties.  The growth of the Philippine economy, for the most part, is expected to remain a bit impervious to the ongoing changes and volatility in the global economy. Although it faces a lot of threats and risks, sentiments toward its growth remain positive within the next one to three (1-3) years due to its strong underlying fundamentals. Aside from this, the ASEAN integration is also expected to stimulate various economic sectors and create further investment opportunities for the country.

Real estate is the biggest gainer from this positive sentiment, and this is expected to continue through the rest of 2016.

Office Market

Metro Manila's office market shows no signs of slowing down, as discussed in the latest Office Briefing released by KMC MAG. In the third quarter of 2015, Metro Manila saw its highest recorded take-up in history due to pre-leasing, reaching 231,412 sq m. As in the previous years, this demand is mainly driven by the ferocious take-up of the outsourcing industry and this is expected to continue well into 2016.

The biggest job provider in the private sector, the outsourcing industry's year on year industry revenue growth is currently at CAGR 27.7% over the past 10 years. In 2016, industry revenue is expected to increase further as the Philippines rises to the top spot of the BPO destination ranking in the whole world, according to US-based firm Datamark. Given this, we anticipate that 2016 will continue to be a landlord's market, and that vacancy and rental rates will remain stable despite the increase in supply.

This year, Bonifacio Global City (BGC) will absorb most of the demand since it is where most of the new supply will come from. BGC's rental growth might slightly ease and vacancies might also increase this year, but we believe it will soon stabilize as firms are forced to move here due to the lack of space in major CBD Makati.