Anticipate a resurgence of trends, buoyant projections, and a robust demand shaping the landscape of the office sector in 2024, particularly for Prime and Grade A+ buildings.
Morgan McGilvray
Senior Director for Occupier Strategy & Solutions
We Asked two of our experts from our team about their perspectives on the office market in 2024.
“Which sector can expect growth in 2024?”
If 2023 was the year of the Healthcare BPO, then 2024 could mark the return of multinational corporations' shared-services.
These shared-service operators tend to focus on quality, both in terms of their building selection, and in terms of their office. Shared-services also tend to have higher environmental standards than other sectors of the market, as developers should note. Growth in MNC shared-services was relatively slow during the pandemic era – with a few notable exceptions – but started to show signs of life again in the latter half of 2023.
If that trend continues, then the market can expect some of the world's biggest companies to be growing their footprints again throughout the Philippines.
Ankur Maheshwari
Senior Associate Director for Occupier Strategy & Solutions
“What’s the state of leasing in 2024?”
We expect demand and leasing activity to be better in 2024.
We will continue to see robust demand for Prime and Grade A+ developments in key districts such as Makati, BGC, and Ortigas, with some prominent buildings seeing rapid take up of multiple floors, especially from existing tenants expanding. Occupancy in some of these LEED-rated top Grade A buildings is reaching 80% with developers revising published rentals upwards.
In the fringes, momentum is relatively slow and part of the reason is bigger interest from larger firms to explore the provinces. Large BPOs are being innovative, willing to explore any markets they can get talent, and less competition for it.
Large occupiers are looking to test all possible markets with flex strategy. Flex will only grow as it has the lowest penetration in the Philippines among most markets in Asia.
From an international perspective, India demand has been robust and nothing suggests otherwise in 2024. Demand will largely be led by GCCs, India Inc., BFSI and Flex, with BPO share declining.