CO-WORKING spaces will continue to enjoy steady growth in Manila, as both foreign and local property players hit the market, a regional real estate report suggests.
Flexible workspace area on the market in the Philippine capital grew by 14 per cent on the year before, to 3.8 million square feet (sq ft) in 2018, according to industry consultancy Colliers.
And that office stock in Manila should grow again by at least 10 per cent a year for the next three years, Colliers director Maricris Sarino-Joson has predicted.
The demand was spurred by a tight office market in Metro Manila, as well as a mobile workforce, and multinational corporations’ quest to lower operating costs, she wrote.
“The segment’s growth has been supported by the improvement of the country’s IT infrastructure, especially after the entry of a third telecommunications company committed to improving nationwide broadband connectivity,” Ms Sarino-Joson added.
She said that future growth should come on factors such as a small business boom, as well as more multinational corporations and outsourcing firms “looking for plug-and-play offices”.
Still, Colliers has projected more mergers and acquisitions as the market consolidates.
Jonathan Wright, the firm’s Asian head of flexible workspace services, also said that operator take-up in the region is expected to slow “as the sector matures and becomes more focused on specific corporate demand, rather than speculative growth in the mid-tier of the sector”.
Manila’s central business district houses 70 flexible workspace centres across 417,000 sq ft, or some 10 per cent of the commercial property market. Meanwhile, in the greater Metro Manila region, co-working space was about 3.2 per cent of office supply.
Co-working operators in Manila include local companies such as Philippines-based KMC Solutions, as well as Malaysia’s Common Ground and the United States’ WeWork.
Filipino developers such as Ayala Land and Robinsons Land have also expanded into the flexible office business, Ms Sarino-Joson noted.