APRIL Lee-Tan
Investing in office spaces is seen to become an increasingly attractive proposition for many developers, as the country continues to enjoy a steady influx of companies setting up shop in the Philippines.
A primary driver of the rise in demand for office spaces, according to property consulting firms Cushman & Wakefield Philippines Inc. and Jones Lang LaSalle Philippines Inc., is still the business process outsourcing (BPO) industry, as the country remains to be among the most attractive locations for offshoring services.
“The strength of the outsourcing and offshoring industry makes the office market an attractive investment choice for both local and foreign investors. Capital values have posted steady growth in Manila’s core business districts, vacancy rates remain low and the continued expansion of reputable multinational companies make the office sector an attractive option,” Joe Curran, general manager of Cushman & Wakefield, said in a report entitled “Asia Pacific Office Forecast 2015-16.”
MIKE Oyson
The report noted that prime and Grade A office leasing demand continued to be positive in 2014 as new and existing outsourcing and offshoring firms continue to enter and expand their footprint in Metro Manila.
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“This trend is expected to continue as the outsourcing and offshoring industry is forecast to remain as the primary growth driver of the office market. Nonetheless, we still see growing office demand from traditional corporate occupiers seeking to either relocate or consolidate office space in select key districts. This sustained office demand should be able to offset supply pressure from the large volume of future stock in the next two years, keeping vacancy levels relatively low and driving moderate rental growth,” the C&W report stated.
In a separate interview with the Inquirer, Curran noted that, apart from the BPOs, a strong office space demand would be supported by traditional companies like insurance, advertising and law firms, that are looking to consolidate their portfolios and come up with more efficient workspaces.
