Rush for office space in Metro Manila continues in Q315

Premium and Grade A office space takeup in Metro Manila's main business districts (CBDs) continued to accelerate in Q315 due to strong pre-leasing activity, according to the most recent Office Briefing published by Savills international associate KMC MAG Group, a Philippines real estate services firm.

More than 200,000 sq m (232,961) was newly delivered in Q3, and almost everything was snapped up, at 231,412 sq m - a record takeup rate. 

"Most of the new spaces delivered have been pre-leased prior to completion; that is why takeup is very high," said Michael McCullough, KMC MAG Managing Director.

Upcoming supply is estimated to reach around 1.8-million sq m in 2018. Despite the significant amount of supply, KMC MAG says that overall office rental and vacancy rates are expected to remain stable given the strong pre-leasing activity.

"We continue to see interest from both local and foreign firms across all CBDs, although most of the interest is currently in Bonifacio Global City (BGC) only because it is where most of the new supply will come from," said McCullough.

"The profiles of companies who have pre-leased or are currently pre-leasing space vary across all CBDs. Ortigas, Bay Area, and Quezon City are very attractive to new IT-BPO firms who are just starting to outsource services and processes to the Philippines because of the lower rates.

"Makati remains the CBD of choice for large-scale enterprises who want to upgrade their headquarters and move to a better location, however many firms are forced to look towards BGC due to the lack of available and suitable space."

Thanks to the sustained IT-BPO industry demand and the relatively low level of new supply in these areas, Bay Area and Quezon City are projected to have the lowest vacancy rates and strongest rental rate growth among the business districts within the next 12 months.

In Q3, the Bay Area recorded a 17% year on year (YoY) rental rate growth, with Grade A rentals averaging from Php673.4 to Php700 per sq m/month and an ultra-low 1.3% vacancy rate.

Meanwhile, Quezon City posted an 8.5% YoY growth, with average Grade A office rates ranging from Php700.4 to Php750.0 per sq m/month. Located in the northernmost part of Metro Manila, Quezon City boasts vacancy rates of under 1% with only 0.2% of its total stock unoccupied, making it the best performing CBD in the country this quarter.

Makati, on the other hand, remains as the premium CBD, posting a 4.3% YoY growth with the highest asking net Grade A rental rates averaging Php 979.1 to Php 1400.0 per sq m/month. In spite of this, Makati's vacancy rate remains low at 3%, and is likely to become lower once Tower 6789 becomes fully occupied.

BGC comes in next, with a rental growth of 3.7% YoY and an average asking rental rate of Php860.4 to Php1,100 per sq m/month. The district's vacancy rate increased slightly to 2.6%; however, it should be noted that this is because it has absorbed most of the new demand, allowing it to post its highest recorded quarterly takeup since Q114 of 49,639 sq m.

Ortigas' growth remains strong at 6.8% YoY, bringing average rental rates up to Php624.6 per sq m/month, with an upper rate of Php750 per sq m/month. Ortigas' strong rental growth is expected to continue, given its current 2.5% vacancy rate and lack of new supply until the end of 2016.

Alabang is the only CBD office market with sluggish growth. YoY growth was 0.6% and vacancy rates 16%. This brought down the average asking rental rates to Php 605.3per sq m/month in Q315 from Php601.8 per sq m/month a year ago.

Interested?

Read the report (PDF)

Etihad to add more flights a week between Abu Dhabi and Manila

Etihad Airways will add three new weekly services between Abu Dhabi and Manila from 1 May 2016, offering a total of 17 return flights per week and seamless onward connectivity from the Abu Dhabi hub to Bahrain, Kuwait, Dammam, Doha, Jeddah, and Riyadh, which are in the top 10 destinations for travellers to and from the Philippines.

Etihad Airways’ President and Chief Executive Officer, James Hogan, said, “The Abu Dhabi-Manila route is one of our strongest in terms of demand and has been capacity-constrained over the past few years. The new services will increase capacity between the two cities by almost 2,500 seats per week, enabling Etihad Airways to better serve the market in the UAE and the Philippines for point-to-point travel.”

The additional frequency is also expected to boost commerce and trade between the UAE and the Philippines. With a belly hold capacity of 18 tonnes, the B777-300ER offers the airline and its freight customers a significant opportunity to grow the export/import business, particularly in the area of electronics and fresh food.

All 17 weekly flights will be operated by a two-class Boeing 777-300ER with 28 seats in Business and 384 in Economy.

Codeshare partner airline Philippine Airlines places its PR code on the current 14 weekly flights Abu Dhabi-Manila operated by Etihad Airways. From 1 May 2016, the partner airlines will offer a combined total of 22 weekly flights between Manila and Abu Dhabi.

Etihad Airways commenced services to the Philippines in February 2006.

Flight schedule between Abu Dhabi and Manila, effective 1 May 2016 

Flight No.	From	Departs	To	Arrives	Every	Aircraft
EY424	Abu Dhabi (AUH)	02:50	Manila (MNL)	15:55	Daily	B777-300
EY423	Manila (MNL)	19:05	Abu Dhabi (AUH)	00:05	Daily	B777-300
EY428	Abu Dhabi (AUH)	10:10	Manila (MNL)	23:15	Daily	B777-300
EY421	Manila (MNL)	00:45	Abu Dhabi (AUH)	05:45	Daily	B777-300
EY435	Abu Dhabi (AUH)	14:35	Manila (MNL)	03:45	Mo, Sa, Su	B777-300
EY434	Manila (MNL)	06:55	Abu Dhabi (AUH)	12:00	Mo, Tu, Su	B777-300

 Note: All departures and arrivals are listed in local time.

Cebu Pacific now flies to Fukuoka

Philippines airline Cebu Pacific (CEB) began flights from Manila to Fukuoka on 17 December. This marks the beginning of the airline's thrice weekly service to its fourth destination in Japan. Aside from Fukuoka, CEB operates direct flights from Manila to Osaka, Tokyo (Narita) and Nagoya, and from Cebu to Tokyo (Narita).

Japan is one of CEB's most popular international destinations from the Philippines. The Japan National Tourism Organization shows that Filipino arrivals in Japan surged by 44% to more than 211,000 from January to October 2015, compared to the same period last year.

The Manila-Fukuoka service operates every Tuesday, Thursday and Saturday, departing Manila at 2:15pm and arriving in Fukuoka at 6:55pm. The return flight departs Fukuoka at 8pm and arrives in Manila at 10:40pm. These flights utilise CEB's brand-new Airbus A320 fleet, with 180 all-economy class seats.

CEB has also launched direct flights between Cebu and Taipei, Taiwan, as well as between Davao and Singapore on December 17, 2015.

"The launches of three international routes from Luzon, Visayas and Mindanao underscore Cebu Pacific's commitment to provide more travel opportunities, and make the Philippines and the world easily accessible to 'everyjuan'," said CEB VP for Marketing and Distribution Candice Iyog.

CEB's network now spans 64 destinations on over 98 routes, including flights to Guam, Dubai, Doha, Sydney, Bali, Seoul, and Beijing.

Interested?

CEB's current promotional fares from Manila to Fukuoka go as low as P6,778, up to 51% lower than other airlines.​ The latest seat sales can be found on CEB's official Twitter and Facebook pages. Guests can also download the Cebu Pacific official mobile app on the App Store and Google Play.