DAVAO CITY — Office space leasing in the city is on the rise, according to consultancy firm Property Interactive Marketing Enterprise (PRIME) Philippines, and the demand is projected to increase in the near-term with more government infrastructure projects lined up and the emergence of new commercial sub-districts.
Raphil D. Saguan, PRIME Philippine associate for capital market and investment, said the “rise quadrant” points to “incoming demand and a wide market.”
“Since office (space) is on the rise now, we can say that in a span of time, depending on the business environment of the city it will eventually (go) in the boom stage,” Mr. Saguan told the media last week in a briefing.
A PRIME Philippines study showed as of the third quarter, office buildings in Davao have an average take-up rate of 88%, with business process outsourcing (BPO) firms occupying 67%, professional services with 20%, and general services/other industries for the rest.
Among the existing commercial districts in Davao City, the Poblacion area has the fastest take-up at 95%, while the Lanang-Bajada and Matina areas have 93%.
On the average, prices for these offices are pegged at P565 per square meter in the Poblacion area, 19% higher than last year’s P475.
“We are encouraging land developers and land owners to develop their real estate at this stage (for office space) to gain a foothold when the boom stage comes,” Mr. Saguan said.
He said the construction of several roads and a railway would allow easier access into the city and expand business opportunities in neighboring areas.
“There are upcoming developments by the government such as the Mindanao Railway System, bypass and coastal road projects. If we have these connectivity, and high exposure of the different areas of Davao City, that makes the city a very easy location to do business,” he added.
Mr. Saguan also cited Davao’s ranking as the third most competitive city, for all cities and among highly urbanized cities, in the National Competitiveness Council’s 2017 index.
“Davao City ranked third… This is the primary competitive city outside Metro Manila in terms of resiliency, infrastructure, government,” he said, adding there is also a competitive labor force that can be tapped.
“These are among the reasons why we see an incoming boom in office and leasing industry… We have a very good potential and capable of generating a lot of business and investment expansions within the city,” Mr. Saguan said. — Maya M. Padillo