SUPPLY of office space will continue to tighten in established central business districts as a lack of "skilled labor" delays projects, according to a real estate consultancy that also noted that lower rental rates and infrastructure developments should make other areas good alternatives.
"We noticed a lot of delays in construction," Julius M. Guevarra, director of research and advisory services at Colliers International said during a quarterly property market briefing in Makati City on Tuesday.
In the first six months, only one of six developments scheduled for completion met the timetable, according to the Quarterly Property Market Report that Colliers International released for the Philippines on Tuesday.
"A lot of projects were pushed back to 2017 [or] 2018 due to lack of skilled labor. This problem could not just be found in Metro Manila -- it's nationwide. The same problem is seen in Cebu and Davao," Mr. Guevarra explained.
As a result, availability of office space will remain tight particularly in the central business districts in the cities of Makati and Taguig in the next two years, he added.
With the tight supply of office space in the traditional business districts, emerging business hubs in the Bay Area in Manila, Quezon City and Muntinlupa City, as well as outside Metro Manila are attracting more locators, Mr. Guevarra noted.
Lower rental rates make emerging business districts even more attractive, with the thrust of President Rodrigo R. Duterte's administration to accelerate infrastructure development in order to make these areas more accessible, Mr. Guevarra added.
"Infrastructure is one of the key points in the economic agenda of the Duterte administration. A lot of these projects are quite exciting -- the airports, railway," he said.
"These will unlock real estate values."
Source: Business World Online