Metro Manila office space take-up to slow down in 2018 —KMC Savills

Demand for office space in Metro Manila is expected to slow down this year, partly due to rising inflation in light of the recently-enacted tax reform law, according to real estate services firm KMC Savills Inc.

KMC Savills managing director Michael McCullough said office take-up in Metro Manila will go down between 550,000 to 500,000 square meters this year from the net take-up of 629,500 sqm in 2017.

McCullough said the tax reform law will temporarily put the market under inflationary pressure.

“But this is just this year,” he said.

Inflation clocked in at 4.5 percent in February, its fastest pace in over three years since coming in at 4.9 percent in August 2014, the statistics office reported.

However, real property prices do not yet felt faster inflation rate during the first two months of the year.

McCullough said property prices will likely reflect inflationary pressures only in the succeeding quarters of the year.

Another 805,000 sqm of gross leasable area are expected be added this year, even if the demand does not complement the supply.

“We don’t expect the same amount of demand this year from last year,” McCullough noted.

“But we are conservative with our projections,” he said. —VDS, GMA News