THE Philippine office demand is likely to keep its growth next year after surpassing the combined office demand for the past two years in 2022.
In a Leechiu Property Consultants (LPC) study, Philippine office demand reached 975,000 square meters (sq.m.) by mid-December.
“Up to mid-2022, it was difficult to visualize year-end demand hitting close to the 1 million sq.m. mark,” LPC Chief Executive Officer David Leechiu said in a statement.
“The results have exceeded expectations but we can’t put our guard down just yet,” he added.
During the first quarter, LPC recorded 124,000 sq.m. of office demand, while it recorded a peak during the third quarter at 313,000 sq.m.
Take-up leveled off in the last quarter at 283,000 sq.m. but the property consultant said it is likely to grow in 2023 due to a notable live requirement of 352,000 sq.m., which pertains to office transactions in various stages of completion.
Meanwhile, LPC Director for Commercial Leasing Mikko Barranda expects office demand from the information technology and business process management (IT-BPM) industry of 210,000 sq.m. or 44%.
“We can thus expect office demand from this sector to continue growing, more so because IT-BPM industry studies estimate that 1.1 million more full-time employees will be hired in the next six years,” Mr. Barranda said.
“This could mean, at the least, an additional annual 476,000 sq.m. of office space requirement up to 2028,” he added.
From 2021 to 2022, office demand from the sector increased by 68% with only some of the employees returning on-site for work.
However, Mr. Barranda expects IT-BPM firms to continue operating on-site in the next few years to maintain efficiencies.
Around 120,000 employees were recruited annually from 2021 to 2022 with 265,000 employees hired by the IT-BPM sector in the past three pandemic years.
The sector registered a cumulative net demand of 628,000 sq.m. in the past three years, which marked an 8% increase in the sector’s 7.5 million-sq.m. footprint.
“The IT-BPM sector continues to stabilize and anchor the economy — not only in Metro Manila but also in other key cities of the country. With traditional office occupiers now also enjoying recovery, real estate is likely to surpass its remaining obstacles in 2023,” Mr. Leechiu said. — Justine Irish D. Tabile