JICC Admin - May 14, 2021
Metro Manila (CNN Philippines, April 12) — Office space rentals saw demand improve anew in the first quarter of 2021, a property consultancy group revealed Monday.
In a statement, Leechiu Property Consultants said 109,000 square meters of commercial space had been leased in the first three months of the year. This is up by 22% from the 89,000 sq.m. taken up the quarter prior, and by a whopping 68% from the 65,000 sq.m. in the third quarter of 2020.
The turnout in office spaces indicates firms have been “thinking long term and are preparing to go back to the office,” noted the consulting company.
The information technology and business process management sector still amassed the biggest chunk of rentals at 33,000 sq.m. This is, however, slightly down from the 34,000 sq.m. recorded in the last quarter of 2020.
E-commerce, which LPC chief executive David Leechiu dubbed as a “sunshine industry,” comes next at 19,000 sq.m. of leased spaces. This is over thrice the 6,000 sq.m. of office space the sector occupied from November to December last year.
LPC likewise noted in a presentation that Philippine offshore gaming operators (POGOs) registered no demand in both the fourth quarter of 2020 and first quarter of 2021, citing the COVID-19 pandemic, crackdown by Chinese authorities, and hefty taxes imposed by the industry.
The Bureau of Internal Revenue earlier required POGOs to settle their unpaid taxes beginning April last year before they are given the go signal to resume operations amid the health crisis while observing minimum health standards. In September 2020, the Palace announced only around 20 POGOs have complied with conditions set by the BIR.
Despite this, the sector accounts for 12% or 31,000 sq.m. of office space being eyed for opening this 2021, according to LPC associate director Mikko Barranda. While it’s too early to say if POGOs will remain in the Philippines, seeing their concerns addressed might help affirm their commitment to the country, he added.
All in all, active office requirements stand at 266,000 sq.m. for the year — BPO firms comprise 33% of the demand while retail firms make up 7% of it.
“Despite the hardships the retail industry has experienced we are seeing companies adapt, innovate and commit to space in anticipation of a recovery,” said Barranda, noting the fulfillment of these requirements will push 2021 demand above 2020’s.
LPC also observed how office contractions tempered in the first quarter of 2021, down by 19% from the quarter prior. The consultancy firm noted this, coupled with improvements in office demand, was a manifestation of “improving investor confidence.” Of the 851,000 sq.m. worth of office contractions made during the period, the POGO sector accounted for 47% of the total or 396,000 sq.m., followed by the IT-BPM industry at 10% or 89,000 sq.m.
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