Manila currently has the second largest supply of flexible workspaces in Southeast Asia next to Singapore, according to JLL.
The growing volume of flexible office space for rent in the Philippines could be one reason for this, as many companies want an alternative to sky-high rents of buildings in city centers. By 2030, JLL expects flexible spaces to represent 30% of corporate portfolios.
A Cost-efficient Option
The concept of shared office space has gained traction in the Philippines during previous years. Millennials mostly drive demand for these properties in their search for a more conducive work environment.
Companies that want to rebrand themselves consider this work arrangement as well since they believe flexible offices improve workforce morale and productivity. For real estate developers, this means a new source of business aside from cashing in on rising rental rates due to strong demand from Chinese tenants.
Commercial and Residential
Rental rates for commercial and residential properties in the Bay Area and Makati City have increased because of demand from Chinese gaming companies, according to Colliers International Philippines. In the first half of this year, these companies occupied more than 180,000 square meters of office spaces. Leasing rates for residential properties near their offices have consequently increased as well.
This occurred because of their employees’ preference for buildings that are close to their workplace. Condominiums in Makati are particularly popular among them. For instance, the monthly rental rate for a three-bedroom unit in the city’s central business district increased by up to P1,080 per square meter.
The forecast increase in flexible office spaces seems possible with the changing needs of tenants, especially startup companies and individuals. Freelance workers in the Philippines also cause demand for such properties to be stable, which leads many developers to launch suitable properties for them.