Gov’t agencies buoy FLI office space business
Despite a predicted slowdown in demand, Filinvest Land Inc. (FLI) remains optimistic that it can maintain its occupancy rates this year both in the residential and office sectors, banking on government clients and regional projects.
FLI president and CEO Tristan Las Marias told reporters during a media chat last week that they were particularly counting on demand from government agencies expanding or upgrading their offices.
“Venturing into government offices was a big help,” Las Marias said, adding that they started “deliberately” targeting government agencies as clients in 2024, when they inked a lease deal with the Department of Trade and Industry (DTI).
Under their agreement, the Gotianun-led developer leased its Filinvest Buendia building in Makati to the DTI, which plans to consolidate the offices of its operating units into one facility.
The property spans 10,668.40 square meters (sq m).
In all, FLI leases around 30,000 sq m of office space to government agencies.
FLI data sent to the Inquirer showed that this was 8 percent of the company’s total office tenant mix as of end-December. The business process outsourcing sector still leads at 60 percent, followed by traditional offices at 29 percent.
Real estate services firm KMC Savills said in its 2024 property market report that government agencies accounted for 27 percent of total office space demand in Metro Manila last year, pegged at 282,600 sq m.
The information technology and business process management sector still took up most of the demand at 42 percent. The vacancy level ended at 20.3 percent last year, KMC said, and this is expected to persist until the end of 2025.
As for the residential market, Las Marias said they were more present outside Metro Manila and, therefore, shielded from the inventory oversupply woes.
“We’re lucky that our inventories are not there,” the CEO said, noting that the surplus was more evident in Pasig City and Quezon City properties.
“We have a lot of projects in the pipeline … we think there has to be a match between the market demand and the location where they prefer it,” Las Marias added.
FLI has condominium projects in Metro Manila as well as residential communities in Davao, Cebu, Cagayan de Oro and Palawan, among others.
According to Las Marias, they are also constructing new buildings in Dagupan, General Santos, Bacolod and Naga.
In the first nine months of 2024, higher residential sales and mall rentals lifted the earnings of FLI, Filinvest Alabang and Filinvest REIT Corp.—the real estate businesses of conglomerate Filinvest Development Corp.—by 27 percent to P21.8 billion.
