The Philippine office market is sustaining its momentum following a 46-percent jump in office space demand in the first half of 2023 against the same period in 2022, Leechiu Property Consultants (LPC) reported Wednesday.

In a hybrid press briefing, LPC director for commercial leasing Mikko Barranda said office demand in January to June period reached 554,000 square meters (sqm), which 46 percent higher than the total demand of 379,000 sqm. during the same period last year.

He said 77 percent of the demand were in Metro Manila, or a total of 426,000 sqm., while provinces shared 23 percent or 128,000 sqm.

Barranda added the biggest office space demand still came from the information technology and business process management (ITBPM) sector taking up 128,000 sqm. of space in second quarter of 2023 alone. For the first six months of the year, demand from this industry reached 237,000 sqm.

He said the growing demand from the ITBPM sector is notable amid the emergence of remote work and global economic slowdown.

On the other hand, demand from Philippine offshore gaming operators (POGOs) jumped to 77,000 sqm. in the second quarter of 2023.

Total office demand from POGOs in from January to June this year reached 88,000 sqm., which LPC said is “as big as the POGO take-up in the last three years combined”.

All transactions of POGOs in the second quarter are in the Bay Area.

“For the first time in a long time, POGOs have taken a relevant space in the last quarter. There was a big lull in that industry from 2019, where at the peak they were taking 700,000 square meters in one single year, dropped to about 20,000 (sqm),” Barranda said.

He said vacancy rate of office buildings remained at 17 percent in Metro Manila.

“So even though the demand is strong, vacancy levels are within the same range because of the influx of buildings that continue, the pipeline of buildings that continue to enter the market,” he added.

Barranda also projected that office supply will drop next year alongside vacancy rates. (PNA)