Office market recovers as hybrid model gets big boost

After seven consecutive quarters of slump, the office market is showing signs of recovery, according to the latest report from Colliers Philippines.

In a recent webinar, Colliers Senior Director, Office Services and Tenant Representative, Dom Fredrick Andaya, pointed out that traditional and outsourcing companies are expected to be the biggest takers as they take advantage of rent correction and the availability of new office buildings in the main business districts.

Additionally, Andaya also expects corporate back-to-work mandates to drive office uptake over the next 12 months.

Colliers recorded approximately 146,100 square meters (1.6 million square feet) of office transactions in the first quarter of 2022, compared to 134,100 square meters (1.4 million square feet) in the fourth quarter of 2021. Traditional businesses and d outsourcing dominated office space occupancy during the period. Some of the notable transactions in the first quarter of 2022 include Facebook, Lazad and ePerformax. These companies have occupied offices in Fort Bonifacio, Makati CBD and the Bay Area.

For tenants who are in wait-and-see mode, Andaya urged them to consider occupying flexible workspaces. In a related development, Andaya said companies with long-term occupancy plans should lock in space in new, sustainable office buildings and take advantage of rent corrections and other landlord concessions.

“The Philippine office market appears to be turning a corner with occupancy stabilizing as we recorded positive net take-up of 26,000 sqm after seven consecutive quarters of negative net absorption. Return-to-office and business expansion plans, supported by the improving pandemic situation and economic stimulus measures, should accelerate commissioning for the remainder of 2022,” Andaya said.

Recommendations

Andaya urged tenants to take advantage of rental corrections and prevailing market conditions. In a related development, landlords are expected to continue to offer flexible rental programs such as rent-free periods, delayed escalations, longer fit-up periods and a tenant improvement allowance to attract and retain tenants.

Hybrid is the way to go

Colliers is also optimistic that traditional and outsourcing companies are expected to lead office absorption in 2022.

Nevertheless, a survey conducted by the Association of Information Technology and Business Processes of the Philippines (IBPAP) showed that 80% of Filipino employees prefer telecommuting to on-site work. The survey also revealed that 90% of employees are more productive in a hybrid model.

Andaya said Colliers expects net takeover to reach 350,000 square meters (3.8 million sq ft) in 2022 after cumulative negative net takeover of -454,400 square meters (-4.9 million sq ft). ) in 2020 and 2021.

Enable a smooth transition to hybrid

In response to the call of the day, leading systems technology integrator Radenta Technologies deployed its Human Empowerment Equals Happy Employees (HEMP) and popular Microsoft Office 365 Business Basic to smoothly transition to a working mode hybrid.

Randall Lozano, president of Radenta Technologies, said Microsoft Office 365 Business Basic is a communication tool for anyone working onsite or remotely, as it facilitates online meetings and video conferencing for a total mix of 1,000 participants. internal and external with features such as breakout rooms, attendance reports, projectors and many more.

Lozano said his employee accounting protects company policies and employee records, tracks time off and vacations, and monitors staff expenses and reimbursements.

In terms of security, Microsoft Office 365 Business Basic works as a backup and file protector. Lozano said administrators manage security policies to keep information secure.

In a related development, Lozano said the HEMP has cloud data storage with encryption capabilities and automated backup facilities to mitigate data loss due to accidental access and computer failures.

Picture credits: Shutterstock

Jose C. Birney