Demand for office space remained robust in the first quarter despite the spike of COVID-19 cases in January due to the Omicron variant and the impact of the Russia-Ukraine war in February and March.
Leechiu Property Consultants chief executive David Leechiu said in a news briefing Philippine office demand in the first three months reached 124,000 square meters.
Leechiu said some 360,000 sq. m. of office leasing requirements were expected to be completed within the next six months.
“Despite an anti-climactic first quarter, we remain optimistic that the property market led by the office sector will bounce back this year—barring any more extraordinary events,” Leechiu said.
“As the economy opens up, we look forward to improvements in office demand, capital values and rents. We believe the real estate industry will have a good story to tell in 2022,” he said.
The information technology-business process management sector continued to lead demand in the first quarter and accounted for 35,000 sq. m.
Office vacancy rate across Metro Manila averaged 19 percent, with BGC and Makati registering lower rates.
Leechiu said the moves to have a hybrid work arrangement could have an impact on the demand for office space moving forward. He predicted that a big chunk of companies would terminate their leases three years from now if a hybrid work set up will continue to be adopted.
He said that if many companies would find stability in going back to the office, a sudden surge in demand for office space would be expected as IT-BPM firms were also aggressively hiring employees while taking little real estate.
Meanwhile, the residential sector continued to recover from the impact of the pandemic as developers launched 4,761 units in the first quarter, up 70 percent from the fourth quarter of 2021.
The number of residential units sold in the first quarter declined by 28 percent to 5,862 from the fourth quarter mainly because of the Omicron surge in January.
Commercial land values in the central business districts remained stable, according to Leechiu.