The Ortigas Center registered the highest office vacancy among Metro Manila in the second quarter of the year, a property services firm said.
In its latest Metro Manila office briefing, KMC Savills Inc. reported that the Ortigas Center posted a Grade A office vacancy of 19.3 percent in the second quarter of the year.
This is despite registering the highest net take-up of office spaces among business districts at 73,700 square meters (sqm) in the first half of the year.
In the second quarter alone, the sub-market recorded around 36,000 sqm of net absorption, as organizations continue to re-engage the market and take advantage of increasingly tenant-favorable conditions.
“As new supply continues to flow into the submarket, available options will remain abundant,” KMC Savills said.
“While Ortigas Center’s leasing activity has been on an uptrend during the first half of the year, vacancies are expected to rise further in the short-term,” it added.
KMC Savills said with 300,000 sqm of stock forecasted for completion in the next 15 months in the Ortigas Center, vacancy rates may approach 30 percent by 2022.
“Well-capitalized occupiers may benefit from the flexibility of both short- and long-term options at more advantageous terms,” it added.
Quezon City and Alabang followed the Ortigas Center in terms of the largest office vacancies registering at 18.3 percent and 17.1 percent, respectively.
Makati CBD and Bonifacio Global City also posted double digit vacancy rates in the second quarter at 10.7 percent and 10.4 percent, while the Bay Area recorded a vacancy rate of 8.2 percent.
KMC Savills reported that overall vacancy in the Metro Manila office market registered record breaking levels at 13 percent in the first half of the year as the COVID-19 pandemic continues.
“This has been compounded by building completions of previously delayed projects – with 150,000 sqm of fresh Grade A office space completed during the quarter,” KMC Savills said.
Despite leasing activity starting to pick up, KMC Savills said non-renewals and pre-termination continue to dampen demand.
“With the influx of new office spaces projected until 2024, vacancies may increase even further, possibly breaching the 1,000,000 sqm threshold of office space in the market,” it added.