By Bjorn Biel M. Beltran
Special Features Writer
TAGUIG CITY is no stranger to change. From a farming and fishing settlement between the ancient kingdoms of Tondo and Namayan more than 400 years ago, it has now risen to become one of the largest and most important districts in the country.
According to a report by international property consultancy firm Pronove Tai, Taguig recently overtook the Ortigas central business district as the second largest office district in the country next to Makati City. It is poised to become the fastest growing office district this year.
Monique Cornelio-Pronove, CEO of Pronove Tai, told reporters last week that as of 2017, Taguig has 1.9 million square meters of office space, growing over a quarter from the year before and surpassing Ortigas Center’s recorded 1.6 million square meters. This accounts for a fifth of the total office stock in the Metro Manila area.
Recorded to have the highest supply of offices open for leasing, Taguig takes up 35% of the total supply of available office space in the metro, according to Pronove Tai. Consequently, it is also the district with the highest rental growth year on year, at a recorded 26% with a monthly average P1,200 per square meter for Grade A buildings. Makati City, comparatively, as the city with the most expensive rental rates, charges a monthly average of P1,460 per square meter (+17% year on year).
That a relatively young city could achieve such a significant role in the economic viability of the country is surprising given its past. Originally a settlement along the shores of Laguna de Bay known for its rice threshers or “taga-giik” — which the city’s name is a Spanish mispronunciation of — Taguig has never received much attention in Philippine history up until the United States government acquired a 25.78-square-kilometer property in the city to serve as a base for its military during the American Occupation.
That base had come to be known as Fort McKinley, or later Fort Bonifacio, and would be the center of much controversy for many years to come, even up to this day, because of its explosive growth following the sale of military land by the Bases Conversion and Development Authority. What is now known as Bonifacio Global City now stands as one of the Philippines’ foremost financial districts.
“At least in the office market, [my outlook for Taguig] is positive because the projections for economic growth is so high,” Ms. Cornelio-Pronove said, noting that the high supply of newly constructed office space in the city will attract tenants who are looking for alternatives to Makati’s older buildings.
Despite the lower costs of renting older properties, that upside is offset by the poorer efficiency of utilities such as air-conditioning and telephone operations, she said.
Pronove Tai’s report predicts that Taguig will be the fastest growing office district in 2018, at a 17% growth rate and 10 buildings forecast for completion. According to the report, of the 817,000 square meters of available office space in Metro Manila this year, almost half (47%) will be in Taguig.
Strong pre-leasing by IT-BPM firms and other traditional businesses in 2017 also stack the odds of Taguig coming out on top in its favor. The consultancy firm predicts that 173,000 square meters or 45% of the city’s 2018 supply of offices will be pre-leased.
Pronove Tai also noted that Taguig City’s vacancy rate opens up more room for office expansion. It projected that the 7% vacancy level recorded in 2017 would fall to 5% by yearend.