Providing green, healthy, and sustainable office space is becoming popular, with landlords now taking advantage of demand from multinational companies and large Filipino firms highlighting sustainability. Colliers believes that occupying healthy and sustainable office space will play a crucial role in stoking demand in the Metro Manila office sector starting 2025.
As of Q3 2024, Colliers estimates that there’s about 2.6 million sq metres of vacant office space in Metro Manila. It will likely take about five years for this vacant space to be occupied by the Metro Manila market. Colliers projects that Metro Manila’s office vacancy reached 20.5% in 2024, a record-high. Despite this, green, healthy, and sustainable office space will likely dominate new office supply in Metro Manila from 2025 to 2027. From 2025 to 2027, Colliers projects about 61% of the new supply in Metro Manila will have green building certifications. Colliers estimates the completion of about 1.2 million sq metres of new office space in Metro Manila from 2025 to 2027. About 722,000 sq metres have green building certifications. For the first nine months of 2024, nearly half of office transactions in Metro Manila were in green-certified buildings.
Aside from providing safe and healthy office spaces, landlords should also help tenants entice more employees to report on-site by highlighting their buildings’ amenities and other value-added features. Developers should also explore ways to differentiate themselves in the market amid a move to adopt green and sustainable offices. In our opinion, the incorporation of green and sustainable features will play an important role in occupier retention and attraction strategies post-COVID. From 2025 to 2027, about 61% of the new supply will be Leadership in Energy and Environmental Design (LEED) or WELL-certified buildings. Most of the buildings due to be completed will offer lower density ratios, curtain wall systems with thermal insulations, touchless access in elevators, vertical gardens, UV disinfection lifts and filtered air circulation systems to ensure a healthy and efficient workplace for traditional and outsourcing occupiers.
Lock in spaces in new and green certified buildings in key CBDs
As employers start to welcome workers back to the office, we recommend that landlords offer spaces that protect their employees’ health and well-being. This may be in the form of occupying spaces in buildings which have Leadership in Energy and Environmental in Design (LEED), Building for Ecologically Responsive Design Excellence (BERDE) or WELL certifications. From 2025 to 2027, Colliers projects about 61% of the new supply in Metro Manila will have green building certifications. Most of the green and sustainable buildings likely to be completed during the period will come from Makati Fringe, Ortigas Fringe and Quezon City. These include Innoland Altaire, Araneta Cyberpark Tower 3, SM North EDSA Towers 4 & 5, GBF Center Tower 2 and The Yuchengco Center.
Explore green building certifications
Developers may also explore green building certifications such as Leadership in Energy and Environmental Design (LEED) or Building for Ecologically Responsive Design Excellence (BERDE) for their projects. For instance, DMCI is eyeing to secure green building certifications for its upcoming project Fortis Residences. Arthaland will also launch six mid-rise condominium buildings in its Sevina Park township in Laguna. Sevina Park is the country’s first residential community to achieve LEED Platinum certification. Colliers believes that adopting green and sustainable features will play a crucial role in future-proofing residential projects.
Prioritize sustainable building features
In Colliers Philippines’ report entitled, Forging Smarter and Greener Buildings, we highlighted that property developers are increasingly taking steps to address climate change by “embracing available advanced technologies”. To further promote sustainability, developers are taking advantage of the globally recognized green building certifications to reduce their properties’ environmental impact and to satisfy occupiers’ Environmental, Social and Governance (ESG) standards. Colliers believes that the future of office buildings leans towards developing spaces which are safer, healthier and are less harmful to the environment. Colliers has also observed that some discerning occupiers prefer or require ESG certified office space. Landlords should be proactive in capturing this demand. In 9M 2024, about 45% of the transactions were in green-certified buildings.
