GLOBAL real property services company Colliers International Philippines is projecting a three percent annual increase rate in office spaces rental in Bacolod City up to 2021.
Colliers reported that as of end of 2018, office rental rates in the Negros Occidental capital city registered at an average of P450 per square meter, or 8.5 US dollars, per month.
The figure is about 2.3 percent higher than the space rental rate during the last quarter of 2017, the report showed.
"We believe that a mix of demand from call centers, medical transcription firms, government agencies, and start-up firms should sustain a healthy increase in lease rates over the next three years," it added.
Colliers earlier reported that office vacancy in the city has remained stable despite completion of new buildings.
Despite the addition of 11,000 square meters of new supply, vacancy has remained low as the new space was taken up by an outsourcing company.
Colliers added that pent-up demand is seen to keep space vacancy in Bacolod City low.
Reports showed that overall vacancy in the city increased slightly to five percent last year from 4.5 percent in 2017.
This was because a couple of smaller and non-outsourcing firms such as banks, law offices, and insurance companies took up newer space along Lacson-Burgos-Rizal-Galo streets and vacating offices in the old city center.
Also, the real property services firm noted that there was no significant increase in vacancy despite the completion of Ayala's Capitol Central property as one outsourcing company occupied the building's entire space.
It said the increase in office stock coupled with additional demand from business process outsourcing (BPO) firms and minimal take-up from traditional companies like firms and government agencies and non-BPO businesses maintained the overall vacancy rate in the city.
"In our opinion, demand is likely to be driven by supply," Collier said, adding that the new space to be developed over the next three years should easily attract tenants especially those within Philippine Economic Zone Authority (Peza)-proclaimed properties.
Moreover, despite new supply coming in from this year to 2021, Colliers sees vacancy rising to only about seven percent per year.
Absorption during the period should also be complemented by demand from banks, insurance firms, and law offices looking to occupy newer space, the company said.
"We expect the Negros First Cyber Center Phase II project to immediately
achieve full occupancy once completed as a couple of existing BPO firms in the city have expressed interest to occupy the new supply," it added.