NEO Office PH eyes full occupancy next year

By Beatriz Marie D. Cruz, Reporter

OFFICE developer NEO Office PH expects to achieve full occupancy next year as leasing demand from business process outsourcing (BPO) companies and small and medium enterprises (SMEs) remains strong, company officials said.

“So far, the challenge right now is we don’t have any space for the tenants because we are already 97% occupied,” NEO Co-Managing Director and Chief Sustainability Officer Gie L. Garcia told BusinessWorld on the sidelines of a briefing last week.

She said the company is in discussions with prospective BPO and SME tenants and expects some lease agreements to be finalized by the first quarter of next year.

NEO owns and operates Grade A, Philippine Economic Zone Authority-accredited office buildings in Bonifacio Global City (BGC). Its portfolio totals about 289,000 square meters (sq.m.) of office space across seven towers — One/NEO, Two/NEO, Three/NEO, Four/NEO, Five/NEO, Six/NEO, and Seven/NEO.

Despite elevated vacancy levels in the broader Metro Manila office market, Ms. Garcia said NEO continues to see steady demand for space, particularly from companies seeking high-quality and sustainable office developments.

She added that the company’s certifications from both local and international green building and sustainability organizations have helped attract tenants amid tighter competition.

“While there is a challenge in the real estate industry right now in terms of filling office spaces, we have been fortunate,” Ms. Garcia said.

BGC remains the only major office district in Metro Manila with a single-digit vacancy rate, at about 9%, according to data from property consultancy firm Leechiu Property Consultants (LPC).

“Luckily for NEO, this has not been a major issue because we are increasingly becoming the preferred choice of tenants, especially among regional companies,” Ms. Garcia said.

All NEO towers hold multiple sustainability certifications, including the International Finance Corp.’s Excellence in Design for Greater Efficiencies  certification, the International WELL Building Institute’s WELL Health-Safety Rating, the 5-Star Building for Ecologically Responsive Design Excellence, and Advancing Net Zero Philippines certification.

NEO Group Chief Executive Officer Raymond D. Rufino said the company has long planned to expand outside BGC, but market conditions have made it cautious.

“There is a lot of supply in the market, and with that as a backdrop, it’s hard to be too aggressive,” he said at the same briefing.

Metro Manila currently has about 2.7 million sq.m. of available office space, based on LPC data.

Ms. Garcia earlier told BusinessWorld that NEO plans to focus next year on reducing indirect emissions and waste across its buildings. The company recently partnered with HMR Envirocycle Philippines, Inc. to allow tenants to drop off old electronic equipment for recycling.

The electronic waste will be processed into materials such as cement, which NEO plans to use in future construction activities, she said.

However, Mr. Rufino noted that traffic congestion and limited public transportation options in BGC remain challenges to tenant productivity and employee well-being.

“You can make a nice building and provide all these amenities, but the number one enemy of productivity in the office is really our transportation problem,” he said.