Office: Overall Grade ‘A’ office vacancy rate in Metro Manila closed at 16.1% at the end of Q3 2022, albeit only 10 basis-point decrease quarter-on-quarter (q-o-q). This is the first time the average vacancy rate declined, after maintaining a positive trajectory since Q1 2020. While this figure is still 190 bps higher year-on year (Y-o-Y) compared to the estimated vacancy rates in Q3 2021, this q-o-q improvement shows that demand is slowly recovering. A positive net absorption of 38,000 sq.m. was recorded this quarter, an improvement from the -37,000 sq.m. in Q2 2022, resulting in a year-to-date net absorption figure of roughly 32,000 sq.m.
Investment: Estimated average office (YoY), rental yields in Q3 2022 stood at 6.20% Year on year ( the rental yields declined by about 10 basis points from its level in Q3 2021. C&W Research estimates rental yields to inch up in the short term, due to several adjustments in the key policy rate hike since the start of Q3 2022.
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