Metro Clark, home to the country’s Green City, saw its overall office space vacancy rate rising to 4.4 as of the second quarter this year although it performed better than Metro Manila and Cebu, according to a new study by KMC Savills.
The latest report by the property management and consultancy firm also showed that the significant gains in the first quarter of 2020 augmented losses in the second quarter following the lockdown. This cushioned the impact for the entire first half of 2020.
For the first half of the year, KMC said that Metro Clark saw a net absorption of 4,400 square meters despite no new completions year-to-date.
The average rental rate also managed to grow by 3.9 percent year on year at the end of June. Growth, however, has substantially declined from the double-digit rates we have seen in the past. Rentals in Clark Freeport Zone still dominate with the average at 563.6 per sq m per month with Angeles, primarily comprised of Grade B office spaces, lagging at P416.2 per sq m a month.
Notably, the report noted that conditions in Metro Clark are comparably better against the larger markets in Metro Manila and Cebu.
However, given the weakness observed in the second quarter, “We may expect conditions to further deteriorate in the coming quarters. Rental growth has already begun its deceleration and may further lose momentum once we see completions pick up late this year.”
Data showed the current office space stock at 44,364 sqm in the Angeles area, but there is a huge supply of 411,024 sqm in development pipeline streaming in since 2019 until 2022 in the Freeport area.
The KMC data showed Clark office space vacancy rate climbing to around 10 percent next year and more than 10 percent by 2022 as more supply come in.
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