Tuesday, August 2, 2011

Dwindling office space in Ortigas CBD drives up rental rates

DWINDLING OFFICE space in the Ortigas business district has caused rental rates here to rise by as much as a fifth as locators continue to prefer the area over new commercial complexes being developed elsewhere in Metro Manila, a property consultancy this week said in a statement.

Office rent in the Ortigas business district has risen by as much as 20% from year-ago levels due to dwindling space. -- Jonathan L. Cellona
Business process outsourcing (BPO) firms are seeking new space in the country’s second-largest business district even as supply rates struggle to match current demand, said Sheila Lobien, director of real estate services firm Jones Lang LaSalle Leechiu (JLLL).

Despite the emergence of new business districts in Manila as well as Marikina, Pasay, and Quezon cities, Metro Manila’s office spaces remain concentrated in Makati City, totaling one million square meters, and Ortigas, where there is close to 800,000 square meters, JLLL said.

“The supply of new office space in Ortigas simply has not matched the rapid pace of construction of new buildings in the Bonifacio area and Makati,” Ms. Lobien said, claiming that only one building -- the so-called 17-storey iSquare -- will be coming on-stream in the area before 2013.

This explains why rental rates have been rising by 15% to 20% in Ortigas since late last year and may continue to rise.

“This, however, does not make the place (Ortigas) less attractive. In fact, the Ortigas district is highly attractive to BPOs seeking an area with three power grids which ensure the availability of electricity even during emergencies,” Ms. Lobien said.

Companies are likely to rank Ortigas among its top location choices due to easy transportation routes to adjoining Marikina and Quezon cities via the Metro Rail Transit Line 3, as well as the presence of commercial establishments, Ms. Lobien said.

Ortigas is also accessible to most residential areas in Metro Manila, she added.

According to the Ortigas Center Association, Inc., Ortigas Center spans the cities of Pasig, Mandaluyong, and Quezon and covers 1.082 million square meters in area. The district is bounded by Ortigas Avenue on the northeast, Meralco Avenue on the east-southeast, Shaw Boulevard on the southwest and Epifanio de los Santos Avenue on the northwest. -- Franz Jonathan G. de la Fuente

Posted on July 27, 2011 07:21:09 PM