Office space is in high demand in The Philippines, particularly in Manila, and the country’s business-process outsourcing (BPO) industry is believed to be one of the main drivers of the Philippine property market in recent years.
A recently published Metro Manila Marketview report from real estate giant CBRE Philippines revealed that 80 percent of the total annual office space demands originate in the country’s BPO sector. The report said that during the second quarter, overall office vacancy rate in Metro Manila dropped to 2.51 percent from the previous quarter’s 3.21 percent. Global firms were expanding at a rapid pace during this period, causing a sharp rise in the demands for office space. It was a host of Prime and Grade A offices that made up the bulk of space rented during this period.
The trend is likely to continue over the coming years as more and more multinational and BPO companies are expected to drive up the demands in office space markets.
“Outlook for the office market remains optimistic for the rest of the year, and increasing office space demand from multinational and BPO companies shall sustain the office market,” chairman and founder of CBRE Philippines Rick Santos said in a statement.
Real estate is not the only sector that has benefited from the BPO boom in the country. The dramatic growth of this sector provided a boost to the retail sector as well, with retail stores in the country remaining open 24/7 to cater to the young BPO professionals having to work during the night. The popularization of the concept of “night shift” has brought a sea change in the country’s culture, with the younger generation experiencing a radical lifestyle change.
Commercial convenience stores and coffee shop chains have become permanent fixtures at the large office building and commercial complexes. Store chains such as 7-Eleven and Ministop are some of the players that have gained from this BPO boom and eventual changes in lifestyle.
And that’s not all—the “night shift” culture has driven the growth of residential property market near business centers.
The report also revealed that ground floor office spaces are more in demand; during the second quarter, their vacancy rate was as low as 5 percent. An addition of 432,000 square meters of space to the gross leasable area is expected to ease supply pressure.
The BPO industry will continue to thrive through the rest of the year, while the overseas workers will continue to add to the country’s foreign exchange reserve. These two factors are expected to contribute to the country’s economic growth in the upcoming months. This is going to help sustain the operations of retail establishments, CBRE’s Santos said.
Source: Business Process Outsourcing Center