From a commercial real estate brokerage point of view, the leasing part of the property market is offering some real momentum this year in various global regions. As businesses build momentum for the year, some cities across SE Asia are reporting good take up of vacant space. There are pockets of opportunity for the astute broker or agent to tap into.
Having just spent some time running commercial property leasing workshops in Manila CBD, it is evident that the leasing market in greater Manila and the 6 major city zones is showing great potential and change. The business base of Manila is seeking to grow. That is particularly the case across office, industrial, and retail space. As always in a market like that, quality buildings are in demand and new projects are in the pipeline for completion over the next 2 years.
The Manila CBD
Looking at the city skyline, new buildings and projects are underway in the city center. Elements of quality and latest technology are being seen as critical to attracting new tenants to available vacant space. There is also a focus by tenants on energy efficiency as part of choosing a new property to occupy.
These are some of the things that became evident in the Manila workshops:
- The priority for many businesses in selecting premises to occupy is on improvement and growth. The right building sends a good marketing message to customers of key businesses. Property owners and developers have to be careful in establishing the right property branding and marketing message.
- The overall tenant mix is a factor impacting the leasing decision for many tenants both in office and retail property types. Anchor tenants and proximity to other thriving businesses will be an attraction in a lease marketing campaign.
- Leasing rents and occupancy costs are commonly equated to $US to get a comparison that works across the different SE Asian cities.
- Regional pockets of properties are creating a marketing advantage. Businesses want to relocate to where things are happening. It seems that success breeds success.
- It was interesting to note that rent review escalations on established leases were quite solid at around 10% pa with some retail property types and locations. That growth can only be driven by the thriving business activity of the location, the population base, and the local demographic.
- Long leases are not desirable in Manila as they restrict investment alternatives. In that case it is more common currently to find 3 year leases with no option in many properties.
From these factors it can be seen that property market opportunity in Manila this year is significant in so many ways. Specialised commercial and retail property agents should do very well this year as long as they build strategy into their business models and watch what is happening locally in property leasing supply and demand.