December 5, 2024 | 12:00am
MANILA, Philippines — A majority of office locators are likely to consider expansion activities to other markets in the country in the next three to five years, according to a survey by Santos Knight Frank (SKF).
Results of the 2024 Occupier Sentiment Survey showed expansion is the top real estate strategy for office occupiers, as voted by 64 percent of respondents.
“After the series of right-sizing initiatives at the height of the pandemic and the years that followed, sentiment toward expansion is now recovering. This is aligned with recorded improving occupancy levels in the Metro Manila office market wherein net absorption for the first half of 2024 is 125 percent more than the annual total for 2023,” SKF said.
It added that while a vast majority of respondents considering expansion come from companies that are already based in the National Capital Region, Metro Manila still commands the highest share in terms of where the respondents want to expand, at 33 percent.
Other locations that are part of the five most preferred areas of expansion are Metro Cebu (31 percent), other parts of Visayas (30 percent), other parts of Luzon (23 percent) and Iloilo (18 percent).
“It seems that the preference for expansion prospects is more tied to where there are existing facilities that can support these occupiers’ operations, rather than compelling them to explore build-to-suit arrangements,” SKF said.
The survey, participated by various stakeholders from office occupiers coming from different sectors and industries, asked locators for their insights on their real estate strategies such as expansion, changes in office design or layout, changes in footprint in their current location, and relocation.
Following expansion, layout or design changes registered the second largest votes at 22 percent. Additionally, 19 percent of respondents said they are likely to pursue changes in footprint in existing locations while 13 percent said they are considering relocation.
In terms of office layout changes, SKF noted that the occupier sentiment survey showed that adopting a more collaborative work design is the top choice among Philippine-based office locators who plan to make changes to their office layout and design, at 95 percent.
It added that only 14 percent of qualified respondents plan to adopt more private workplace design.
“With hybrid generally seen as the way forward for progressive work arrangements, the office must be designed in such a way that it entices employees to travel to the office. Having a workplace that encourages productivity and offers amenities that usually can’t be enjoyed at home can serve as a step in the right direction,” SKF said.
Meanwhile, with only 18 respondents indicating possible changes to the footprint in current locations, 81 percent expect a considerable level of stability in terms of leased area in current locations.
Among those who do expect footprint changes, 55 percent expect a significant increase, while another 17 percent expect a slight increase. Nobody chose the possibility of a significant decrease, but 28 percent do expect some slight space contraction.
Be the first to comment