The takeup of office spaces has already exceeded the full-year 2017 level as of September this year, property consultants Leechiu Property Consultants (LPC) said Tuesday.
In a press briefing in Makati City, LPC CEO David Leechiu said takeup in Metro Manila was recorded at 799,653 square meters (sqm) for the first three quarters of the year, already exceeding the 774,957 sqm taken up in the full-year 2017.
"We're seeing unprecedented growth in Metro Manila as well as in key cities outside the capital like Clark and Cebu," he told reporters.
"2018 looks like it will still be another banner year for the office segment, not just in Metro Manila but also for other cities," he elaborated.
The bulk of the demand came from the information technology - business process management (IT-BPM) sector, which accounted for 301,275 sqm.
According to Leechiu, most of the firms that outsource are located in the United States and operate on a dollar basis. With the recent devaluation of the peso, operations in the Philippines have been cheaper to maintain for foreign firms.
"BPOs are not investing heavy capex [capital expenditure] in the Philippines, but they're investing in a lot of opex [operational expenditure]. Every devaluation that happens, it becomes cheaper for them to operate here," said Leechiu.
He added that Metro Manila is expected to add 3.83 million sqm until 2023 from its current office supply of 10 million sqm.
Following Metro Manila, Leechiu said that Clark, which is now being developed by the government, is expected to account for much of the office takeup.
"We foresee that Clark, particularly the new Clark Global City, will continue to be a preferred location for firms in the IT-BPM space and gaming," he explained.
"Clark is well on its way to being the next big location outside Metro Manila," elaborated Leechiu.
Leechiu noted, however, that with those looking to take up office spaces in the country are on a wait and see mode while deliberations on the proposed second package of tax reforms are being heard in Congress.
"TRAIN 2 has not had any effect for now," he said.
The second package of tax reforms or the Tax Reform for Attracting Better and High-quality Opportunities (TRABAHO) was passed in third and final reading by the House of Representatives earlier this month.
The proposed law seeks to gradually lower corporate income tax (CIT) rates to 20 percent from the current 30 percent, or by 2 percent annually starting 2021.
It also plans to rationalize and consolidate fiscal incentives under a single omnibus incentive code. — BM, GMA News