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Office occupancy rate hits record 97% in Q1

By Louella D. Desiderio (The Philippine Star) | Updated June 6, 2013 - 12:00am
MANILA, Philippines - Office occupancy rate in Metro Manila hit a record high in the first quarter amid high investor confidence given the country’s positive economic performance, real estate services firm CBRE Philippines said.
Data presented by the firm in a briefing yesterday showed that the occupancy rate in the office sector was at 97 percent across Metro Manila’s central business districts in the first quarter of 2013.
It noted that occupancy rate in Metro Manila has consistently been above 90 percent since 2011.
Joey Radovan, CBRE vice chairman and head of global corporate services, said the  business process outsourcing (BPO) sector is still the biggest driver for demand in the office market.
“The reason why they (BPOs) come here is really the cost,” he said, noting that the Philippines offers the cheapest cost for offices in Asia.
He said that real estate occupancy cost accounts for between 11 to 15 percent of the BPO’s expenses.
For this year, he said, the firm estimates that office space take up in Metro Manila will reach 450,000 square meters, about the same as last year’s.
Apart from demand from the BPO sector, he noted that there is likewise robust requirement from corporate firms.
For his part, CBRE Philippines chairman and founder Rick Santos said that with the pace and general trend across Asia Pacific geared toward efficient commercial real estate, new developers are advised to consider green construction.
“Green is the new gold in real estate development,” he said.
While there are still a few certified Leadership in Environment and Energy Design (LEED) and Building for Ecologically Responsive Design Excellence (BERDE) office developments in the country, he noted that occupancy rates in these buildings are significantly high.
“As the outsourcing and offshoring sector gains strength in the country, we see more occupiers and developers prioritizing flight to quality, with green buildings becoming more the norm than the exception,” he said.
For residential properties, the firm said strong demand is still expected in Metro Manila given the growing number of overseas Filipino workers (OFWs) and BPO employees.
Jan Custodio, CBRE head for global research and consultancy, said demand for both condominiums and single-detached units in Metro Manila remains strong.
The demand, he said, is coming from the rising number OFW and BPO employees.
He noted that BPO full-time employees alone grow by approximately 30,000 every year.
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