Construction material prices flat in February

The wholesale price growth rate of construction materials in the National Capital Region (NCR) remained flat in February compared to a year earlier, according to the Philippine Statistics Authority (PSA).

Data showed the construction materials' wholesale price index (CMWPI) posted a zero-percent year-on-year growth last month compared to 0.1 percent in January.

Its annual growth rate in February 2024 was at 1.0 percent.

Main factor for the flat rate was the slower annual increases in the indices of three commodities.

The price index of doors, jambs and steel casement was 0.5 percent in February, lower than the 0.6 percent in the comparable month; electrical works, 0.2 percent from 0.3 percent; and painting works, 1.0 percent from 1.1 percent.

Three commodity groups, on the other hand, had higher annual increases in February compared a month earlier.

The price index of hardware was 0.2 percent from 0.1 percent in January; tileworks, 1.1 percent from 0.8 percent; and plumbing fixtures and accessories/waterworks, 0.8 percent from 0.7 percent.

PVC pipes posted an annual increase of 0.1 percent compared to a 0.1 percent annual decline in January.

On the other hand, there were slower annual declines in the indices of cement at -1.0 percent from -1.1 percent; reinforcing steel, -0.1 percent from -0.3 percent; and fuels and lubricants, -3.3 percent from -3.4 percent.

The indices of the rest of the commodity groups either retained their respective previous month's annual growth rates, or had zero percent annual rates in February, the PSA said.

The CMWPl measures changes in the average wholesale prices of construction materials. It is a variant of the general wholesale price index (GWPI) and is used in the computation of price hikes of construction materials for various government projects.

Source: Manila Times

Metro Manila office rental prices decline despite improved vacancy rate

Vacancy rate in Metro Manila’s office market improved in the second quarter of 2024, yet rental prices for office spaces have continued to decline since 2023, according to real estate services and investment firm CBRE Philippines.

“This may look good on the upper hand, but zooming into the prices of each sub-district, we have been noting a trend of declines or reductions in rates as well,” CBRE Philippines Research Head Samantha Laureola said during a briefing last week. 

Metro Manila’s fair market rents (FMR), which represent the typical rental prices for office spaces, have decreased by 2% to 19% across various sub-districts from the first quarter of 2023 to the present. 

The Bay Area’s FMR fell 19% from the first quarter of 2023, followed by a 13% decrease in Makati A&B premium office buildings. Alabang also went down 10%, North Bonifacio declined 3%, and Makati Prime went down 2%.

Meanwhile, Quezon City rose 9% and McKinley inched up by 6%. Ortigas also increased by 2%, and Bonifacio Global City (BGC) rose by 0.4%.

“So lower rates, potentially more attractive lease structures for clients, higher demand, and lower vacancy overall,” she added.

The vacancy rate went down to 17.8% in the second quarter of 2024 from 19.7% in the same period last year.

CBRE also revised its initial forecasted vacancy rate from 18.8% to 22.6% by the end of the year due to the Philippine Offshore Gaming Operators (POGO) ban. 

Makati Prime had the highest FMR in the second quarter of this year at P1,289.01, followed by BGC at P1,170.88, while North Bonifacio and the Bay Area logged P1,076.88 and P702.64, respectively. 

Makati A&B recorded an FMR of P789.40, McKinley at P834.06, Ortigas at P764.39, Alabang at P671.40, and Quezon City at P735.35.

“Lower FMR for most of the major Metro Manila markets as developers continue to provide aggressive rates to spur transactions,” the firm said.

On a quarter-on-quarter basis, CBRE Philippines Director of Advisory and Transactions Services Garri Amiel Guarnes said the Bay Area had the highest reduction of 7.3% in FMR in the second quarter of 2024.

“That’s a lot to do with the transactions, government take-ups within the Bay Area, and the high number of square meters being taken by the government offices,” he said.

The office market logged 257,200 square meters (sq.m.) of office leases for the second quarter, driven by government take-ups that accounted for a 26% share. 

Some of the biggest government leases during the first half went to Filinvest, including the National Bureau of Investigation in Cyberzone Bay City Towers and the Department of Trade and Industry in Filinvest Buendia. 

Despite CBRE’s expectation that the vacancy rate by year-end will hit 43% due to the POGO ban, the Bay Area was the top district for the second quarter of 2024 with 83,400 sq.m. of leases in the country.

SERVICED OFFICE VACANCY RATE HIT 20.6%

Meanwhile, the vacancy rate of Metro Manila’s flexible market — comprising coworking spaces, serviced offices, and short-term leases — surged 20.6% to 7,000 vacant seats in the second quarter due to the opening of new sites across the area, CBRE Philippines said.

This figure was 6.75% lower than the 14% vacancy rate in the same period last year, and lower than the 17% recorded last quarter.

CBRE Senior Research Analyst Angela Joyce Sumalinog said the increase in vacancy was driven by the opening of new sites in Metro Manila, where Fort Bonifacio recorded the lowest vacancy rate at 11%.

North Bonifacio’s vacancy rate fell to 10% in the second quarter, while BGC also decreased to 10%. McKinley’s vacancy rate rose to 18%.

The vacancy rate in Makati increased to 19%, Ortigas doubled to 24%, and Quezon City reached 22%. Meanwhile, the Bay Area and Alabang saw increases to 25% and 52%, respectively.

“Another factor that we’re seeing that can affect the flex market would be comparing serviced offices versus vacated spaces with quality fit-outs. The former would often have a premium on rates of 50% to 80% over three to five years,” Ms. Sumalinog said.

CBRE reported that Metro Manila rates range from P5,000 to P36,000 per seat per month.

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Source: Business World

Construction materials prices slows in May

The wholesale price growth of construction materials in Metro Manila slowed down in May compared to last year's rate due to lower annual increase of electrical works, the Philippine Statistics Authority (PSA) said.

Latest data showed that the average growth of the construction materials wholesale price index (CMWPI) in the National Capital Region slowed to 0.6 percent last month from 6.6 percent in May 2023.

On a monthly basis, it was also slower compared to April's 0.7-percent growth rate.

"The deceleration in the annual growth rate of CMWPI was mainly caused by the slower annual increase of electrical works at 1.7 percent in May 2024 from 2.6 percent annual increment in April 2024," the PSA said.

Hardware also posted a 2.7-percent year-on-year growth in May, slower from the 3.0 percent in the previous month.

Seven other commodity groups registered slower annual increases during the month as compared with April.

Plywood posted 1.4-percent growth in May from 1.5 percent a month earlier; lumber with a 0.4-percent growth from 0.5 percent in the previous month; GI sheets registered a 3.1-percent growth rate from 3.2 percent; and structural steel with 1.1 percent from 1.6 percent.

In addition, doors, jambs and steel casement posted a 0.9-percent growth rate during the month from 1.0 percent; painting works with 1.6 percent from 1.9 percent; and PVC pipes with 0.7-percent growth rate from the previous month's 0.9 percent.

Annual decreases, meanwhile, were recorded in the price index of sand and gravel at 0.6 percent in May from 1.2-percent annual increase in April. Further annual drop was seen in prices of tileworks, which recorded a 1.0-percent drop from 0.2 percent a month earlier.

On the other hand, metal products posted higher annual growth rates at 1.0 percent in March from 0.7 percent of the comparable period, and fuels and lubricants at 15.3 percent from 10.9 percent.

An annual increase was also seen in the index of plumbing fixtures and accessories at 0.5 percent in May 2024 from a 0.2-percent annual decrease a month earlier.

Slower annual decreases, meanwhile, were recorded in the indices of cement at 2.1 percent from 2.5-percent annual drop in the previous month and reinforced steel at 1.0 percent from 1.1-percent annual decline.

Source: Philippine Statistics Authority