— PHILIPPINE STAR/MICHAEL VARCAS
By Beatriz Marie D. Cruz, Reporter
OFFICE DEVELOPERS with aging buildings should invest in redevelopments and green upgrades to sustain tenant demand, as occupiers increasingly favor higher-quality workspaces, property consultants said.
“Older buildings do not necessarily require full redevelopment to remain competitive,” Mikko Barranda, director for commercial leasing at Leechiu Property Consultants, said in an e-mailed reply to questions.
“Submarkets like Makati central business district and Ortigas Center, which have a higher concentration of aging office stock, will increasingly require thoughtful repositioning strategies to defend both occupancy and rental levels,” he added.
In Makati alone, about 320,000 square meters of vacant office space sits in buildings aged 20 years and older, according to Leechiu’s fourth-quarter property market report.
Consultants said this segment faces the strongest pressure as tenants reassess space requirements and operating costs.
Mr. Barranda said developers could preserve appeal by upgrading lobbies, elevators and common areas, while improving air-conditioning efficiency and building systems. These measures can help narrow the gap with newer offices without requiring a complete rebuild.
Sustainability upgrades are also becoming more important as tenant requirements evolve. Developers are gradually adopting green building certifications as occupiers place greater weight on environmental and workplace standards.
Certifications drawing tenant interest include the Philippine Green Building Council’s Building for Ecologically Responsive Design Excellence, the International Finance Corp.’s Excellence in Design for Greater Efficiencies and the International WELL Building Institute’s WELL Health-Safety Rating.
“We’re observing flight to quality by tenants from aging assets to newer quality-grade buildings,” Janlo C. De Los Reyes, head of research and strategic consulting at JLL Philippines, said in a Viber message. “Landlords can address this by investing in their buildings to help retain and attract tenants.”
Joey Roi H. Bondoc, director and head of research at Colliers Philippines, said proposed legislation could help accelerate redevelopment activity.
The Condominium Redevelopment bill seeks to set clearer rules for maintaining, repairing and redeveloping condominium projects, including office buildings.
“If passed into law, it would provide an easier process for tearing down old condominiums and redeveloping them,” he said by telephone.
Several measures have been filed in Congress, including House Bill No. 2286 and Senate Bill Nos. 235, 922 and 1442, though these remain pending at the committee level.