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After taking the fast lane due to rapid growth and expansion, the local office market in the Philippines is now changing lanes — now taking the slow down lane due to a number of business process outsourcing (BPO) companies halting their expansion plans, according to Pronove Tai International Property Consultants. The reason for the slowdown was the uncertainties in securing accreditation from the Philippine Economic Zone Authority, as reported by Manila Standard.
“It’s push and pull, and it is creating a sense of uncertainty, which the business sector does not want to see. If we can have something that’s very straightforward, and we know at least we can make our five-year plan, and nothing’s going to change, that’s a lot better for business,” Pronove Tai chief executive Monique Cornelio-Pronove said via Manila Standard.
Based on the data released by Pronove Tai, the second quarter has experienced a 22-percent drop in office take-up in Metro Manila, which is 262,000 square meters in the first quarter down to 214,000 sq. m. in the second quarter. In terms of vacancy, data showed Mandaluyong City and Quezon City are the cities that have the highest vacancy rate, with 12 percent and 10 percent, respectively.
Meanwhile, the information technology-business process management sector experienced a drop in office space demand, with a 50-percent decrease, which is from 135,000 sqm in the first quarter to 69,000 sqm in the second quarter. The sector was known to be a top factor that office space demand in the country. But due to the fall, the sector is now second place to traditional offices.
“There was a general atmosphere of uncertainty within the business sector. We should allay this by ensuring a stable and predictable business environment as well as by speeding up the implementation of the ease of Doing Business Act,” Pronove said via Manila Standard.