--- title: What Is Swing Space, and When Does Your Business Need It? description: Swing space is temporary office space used during a renovation, move or lease gap. See when Philippine companies need it and what to check first. image: https://blog.flyspaces.com/hubfs/flyspaces-landing-images/FlySpaces%20Offices%20for%20Rent%20(2).jpg --- [![spacesasia-logo](https://blog.flyspaces.com/hs-fs/hubfs/SpacesAsia%20-%20June%202019/spacesasia-logo.png?width=260&name=spacesasia-logo.png "spacesasia-logo")](https://blog.flyspaces.com/) - [Home](https://flyspaces.com/) - Navigate - [Flexible Workspaces](https://blog.flyspaces.com/tag/flexible-workspaces#blog-nav) - [News and Events](https://blog.flyspaces.com/tag/news-and-events#blog-nav) - [Industry Insights](https://blog.flyspaces.com/tag/industry-insights#blog-nav) - [City Guide](https://blog.flyspaces.com/tag/city-guide#blog-nav) - [Case Studies](https://blog.flyspaces.com/tag/case-studies#blog-nav) - Connect - [Contact Us](https://flyspaces.com/contact-us) - [Subscribe](https://flyspaces.us14.list-manage.com/subscribe/post?u=0b15b0bb7a66ae626f3388eb9&id=f72d186210) - Share : 5 July 2026 [Listerlynn Joy Garingo - De La Serna](https://blog.flyspaces.com/author/joy-garingo-delaserna) # What Is Swing Space, and When Does Your Business Need It? Swing space is temporary office space that a company uses while its permanent office is being renovated, rebuilt, moved or expanded. Organizations use it during transitions such as [expansions, contractions, relocations or renovations](https://www.qpractice.com/ncidq-glossary/swing-space/), usually for a few months up to a couple of years. In the Philippines, the lease market shapes how swing space works. According to [Baker McKenzie's Philippine leasing guide](https://resourcehub.bakermckenzie.com/en/resources/global-corporate-real-estate-guide/asia-pacific/philippines/topics/leases), lease terms are generally freely negotiable, commercial and retail leases are normally set at three, five or 10 years, and landlords commonly ask for advance rent equal to three months. A company with a hard lease end date or a closed building therefore has little room to improvise, and a plan made early costs less. ### Four ways companies get swing space #### Temporary rooms or phased moves inside your own building You can keep staff in the building and renovate one floor or zone at a time, or build temporary rooms on floors that are not under works. Philippine tenants [generally need the landlord's consent](https://resourcehub.bakermckenzie.com/en/resources/global-corporate-real-estate-guide/asia-pacific/philippines/topics/leases) before altering structural, mechanical, electrical, plumbing, fire and life safety, or air-conditioning systems. Temporary rooms that touch those systems need that consent first. For freestanding partitions, ask your building administrator before you order anything. Dust and noise need planning. A US contractor, [Wolgast, writes](https://www.wolgast.com/blog/what-experienced-facility-managers-know-about-phased-construction-in-occupied-offices) that environmental controls need to be designed into an occupied-office project from the start, not added after issues arise. Ask your contractor how dust, noise and after-hours work will be handled and write the answer into the works agreement. #### Serviced or managed office space A serviced office is furnished space in an operator's building. A managed office is a fitted private floor run by an operator for one client. [Colliers reports](https://bworldonline.com/editors-picks/2026/08/25/772067/slower-q2-but-office-market-stays-resilient-colliers/) that in Metro Manila, flexible workspace net take-up doubled year on year to about 6,000 seats in the first half of 2026, and flex stock reached around 60,000 seats. The same [Colliers Q2 2026 report](https://www.colliers.com/en-ph/research/property-market-report-office-q2-2026-philippines) puts overall office vacancy at a stable 19%. With that much vacant space, tenants may have room to ask for shorter terms, although this varies by building and operator. That is our reading, and Colliers does not make the claim. #### A short sublease or lease of a regular office You can lease an ordinary office for a limited time, either from a landlord or from another tenant with spare space. A tenant may sublease unless its own lease prohibits it, and [assigning a lease generally needs the landlord's consent](https://resourcehub.bakermckenzie.com/en/resources/global-corporate-real-estate-guide/asia-pacific/philippines/topics/leases). This route gives you the most control over the space and usually takes the longest, because you negotiate a lease and may need a fit-out. With commercial terms normally running three years or more, a term of 12 months or less is something to negotiate early. #### Several of your own offices A large organization can spread staff across sites it already uses. In 2018, [BPI said](https://www.rappler.com/business/200628-bank-philippine-islands-rebuild-headquarters-makati/) that while its Makati headquarters was rebuilt, staff would likely move to BPI offices across Metro Manila, including Makati, TriNoma in Quezon City and Alabang in Muntinlupa. The new headquarters [broke ground on 15 Mar 2022](https://www.rappler.com/business/photos-bpi-breaks-ground-new-headquarters-makati-city/) at a construction cost of PHP 13.6 billion, with completion expected in the fourth quarter of 2029. That is a decade-long swing period, which shows how long the arrangement can last for a major rebuild. ### When you need swing space A renovation or restack in an occupied building. A restack means reorganizing which teams sit on which floors. [Wolgast points out](https://www.wolgast.com/blog/what-experienced-facility-managers-know-about-phased-construction-in-occupied-offices) that, unlike a vacant renovation, occupied office construction carries operational risk at every phase. When the work is loud or dusty, emptying a floor and moving people out can be simpler. A lease that ends before the new office is ready. Philippine law has a rule that catches some tenants out. Under [Article 1670 of the Civil Code](https://www.therealestategroupphilippines.com/2018/04/provisions-lease-new-civil-code-philippines/), if a tenant keeps using the premises for fifteen days after the term ends with the landlord's acquiescence, and no notice to the contrary was given, an implied new lease arises. It runs for a period set by the Civil Code and not for the original term. Where rent is paid monthly, the lease runs month to month, and [it expires at the end of any month once the landlord demands that the tenant vacate](https://business.inquirer.net/268171/a-relationship-impliedly-renewed). You should not plan a move around this rule, because the landlord can end it on a month's notice. Read the holdover clause in your own lease as well. Holdover rent is what the contract says you pay after the term ends. As an illustration only, a monthly rent of PHP 1,000,000 with a 150% clause becomes PHP 1,500,000 a month (1,000,000 × 1.5). A sudden rise in headcount or a project sprint. A team may need desks in weeks, which a standard lease rarely allows. [Colliers advises](https://www.colliers.com/en-ph/research/property-market-report-office-q2-2026-philippines) businesses to consider flexible and managed office solutions to reduce capital outlay and improve scalability. A building that is closed or damaged. A [magnitude 6.9 earthquake struck Cebu province](https://insiderph.com/cebu-businesses-unite-mount-recovery-efforts-after-deadly-earthquake) on the evening of 30 Sept 2025. In October, the [Cebu City Council urged BPO companies](https://www.philstar.com/cebu-news/2025/10/27/2482880/bpos-urged-allow-wfh-amid-quakes) to consider work-from-home for eligible staff, noting that building inspections, aftershocks or safety advisories can keep people from reporting on site. A swing space plan gives you a second option when a building is shut for inspection. Your lease may also address damage. Unless the contract says otherwise, [a lease ends if the premises are totally destroyed by a fortuitous event](https://resourcehub.bakermckenzie.com/en/resources/global-corporate-real-estate-guide/asia-pacific/philippines/topics/leases). If the destruction is partial, the tenant may choose either a proportional reduction of rent or rescission of the lease. Check your lease for its own force majeure wording. A merger or a review of your office footprint. Swing space is also used [when a company needs to assess its office footprint](https://www.qpractice.com/ncidq-glossary/swing-space/) and needs a temporary place to house essential resources while it does. After a merger, for example, leadership may want to see how each team uses space before it commits to a long lease. ### Philippine rules to check before you move anyone PEZA. If your company is PEZA-registered, location matters. Under the CREATE Act, [a registered enterprise's activities must be conducted within the boundaries of the ecozone](https://portcalls.com/peza-to-support-it-bpm-operators-transferring-to-boi/) to be entitled to fiscal incentives. [BIR guidance for PEZA-registered IT-BPM firms](https://bir-cdn.bir.gov.ph/local/pdf/RMC%20No.%2046-2023.pdf) adds that an extension office used only to rearrange the premises needs a letter of authority from PEZA for the additional operating area. That guidance is written for IT-BPM firms that transferred registration, so other registered enterprises should ask PEZA what applies to them before relocating staff. Registrations. Ask your accountant whether a temporary site must be registered with the BIR. [BIR Form 1905](https://bir-cdn.bir.gov.ph/BIR/pdf/1905%20October%202025%20ENCS%20Final.pdf) covers a change in registered address. Your city hall business permit may also need updating. VAT and withholding tax. Confirm whether quoted rent includes VAT. In a typical VAT-exclusive lease, [the lessor charges rent plus 12% VAT, and the lessee withholds 5% from the basic rent](https://www.respicio.ph/commentaries/do-lessors-need-to-pay-withholding-tax-aside-from-vat-in-the-philippines). Ask your tax adviser how this applies to your contract, including to common use service area charges (CUSA) and service fees from operators. ### Where swing space fits in a property portfolio In a [1999 paper](https://centaur.reading.ac.uk/27239/), researchers Virginia Gibson and Colin Lizieri of the University of Reading argued that companies need flexibility for the volatile, short-lived part of a business and not for every use. [They described](https://centaur.reading.ac.uk/35694/1/wp0114.pdf) a core of long-term space, a first layer of medium-term leases, and a second layer of space on demand where speed matters most. Swing space fits that second layer. ### What contract length does to your accounting The Philippines has adopted IFRS as Philippine Financial Reporting Standards, and [PFRS 16 on leases took effect on 1 Jan 2019](https://www.pfsrsc.org/government-organization-our-standards). Under IFRS 16, a tenant may [expense a lease with a term of 12 months or less and no purchase option](https://www.houseofcontrol.com/blog/ifrs-16-exemptions-during-implementation), normally by the same amount each month, instead of recording an asset and a liability. Readers who report under US accounting rules face [a similar 12-month exemption under ASC 842](https://viewpoint.pwc.com/dt/us/en/pwc/accounting_guides/leases/leases__4_US/chapter_2_scope__1_US/22_exceptions_to_app_US.html), though its purchase option wording differs slightly. There are two traps. First, a lease that starts at 12 months and is later extended to 18 months [must be recorded from the date of the change](https://www.houseofcontrol.com/blog/ifrs-16-exemptions-short-term-and-low-value). An extension option does not automatically disqualify a lease, because [the test is whether the tenant is reasonably certain to use the option](https://www.bdo.com.au/en-au/blogs/corporate-reporting/how-does-the-short-term-lease-exemption-work-in-ifrs-16). Second, some flexible workspace contracts may not be leases at all. A contract is a lease only if it relates to an identified asset, and [when the supplier holds a substantive right to substitute the space, there is no lease](https://ifrscommunity.com/knowledge-base/ifrs-16-identifying-a-lease/). Which side your contract falls on is a judgment for your auditor. Tax can differ from accounting. [PwC Philippines noted in 2019](https://www.pwc.com/ph/en/tax/tax-publications/taxwise-or-otherwise/2019-taxwise-or-otherwise/tax-implications-of-pfrs-16-leases.html) that depreciation of the right-of-use asset and interest recognized under PFRS 16 are not deductible expenses for income tax purposes. Ask your tax adviser how your contract is treated. ### Six checks before you commit 1. Set the timeline early. One [Philippine office-setup guide](https://www.officepro.ph/post/the-complete-guide-to-office-space-setup-in-the-philippines) advises starting when your lease is expiring within the next 6 to 12 months. For larger or more complex moves, [a UK workplace design firm](https://www.oktra.co.uk/insights/is-your-office-lease-expiring/) recommends starting 18 to 24 months before expiry. Commercial leases of three to 10 years mean your expiry date is known well ahead. 2. Budget for the cash up front. A new lease may call for [three months of advance rent](https://resourcehub.bakermckenzie.com/en/resources/global-corporate-real-estate-guide/asia-pacific/philippines/topics/leases), as noted above, plus any deposit. [Denham Wolf](https://successfulnonprofits.com/portfolio/jon-denham-paul-wolf/), a New York real estate adviser, includes a swing space contingency in project budgets alongside design and construction contingencies. 3. Match the contract length to your accounting. Agree the term with your finance team before negotiating, and check what happens if you need an extension. 4. Check consent and registrations. Get landlord consent for any alterations, confirm PEZA requirements if they apply, and ask your accountant about BIR and city hall updates. 5. Plan for the connection. Before switching off existing systems, [build in network redundancy and run pre-tests](https://www.skylineconstruction.build/commercial-office-restack-factors/). 6. Tell staff early. [Staff should be told clearly](https://density.io/resources/restacking-office-space) where their new workspaces will be and how to reach them. If the temporary site is far from the current one, check employment contracts and any union agreement for place-of-work terms. If you are weighing swing space against a short sublease or staying put with phased works, the FlySpaces team compares terms, arranges viewings and helps clients reach an agreement. If a space is a poor fit for your brief, we will say so. Tags: [swing space](https://blog.flyspaces.com/tag/swing-space) ![](https://blog.flyspaces.com/hubfs/SpacesAsia%20-%20June%202019/author-img.png) ##### [Listerlynn Joy Garingo - De La Serna](https://blog.flyspaces.com/author/joy-garingo-delaserna) Joy Garingo - De La Serna is a Filipino business executive specializing in the real estate, flexible workspace, and Employer of Record (EOR) sectors within the Asia-Pacific (APAC) region. She is involved in creative ventures and community-centric workspace environments that support local startups, founders, and generational shifts in hybrid work styles. 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