BPOs drive office property market

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The Philippine office segment has a lot more room to grow if seen from the ex­perience of business process outsourc­ing (BPO) powerhouse, India.

According to property consultancy firm CBRE, the country’s office market has yet to be in the same level of development as that of in India.

Rick Santos, chairman of CBRE Philippines, said the Philippines is a decade late in becom­ing a formidable force in the non­voice offshore outsourcing, a business which India developed early on.
“We are where India was in the office sector about 10 years ago. We are 10 years behind In­dia in terms of where we actually are in terms of trajectory,” said Santos in a presentation to members of the Asia Pacific Real Estate Associa­tion (APREA) in the Philippines.

Santos noted that while Manila and Cebu are among the top outsourcing destinations in the world, the list of the top destinations is dominat­ed by India, with six of seven being Indian cities.

With 6 million square feet of office space expected to be leased out for the year, the Phil­ippines continues to have a strong presence in the global BPO industry, according to Santos. “(This) is three times that of Singapore, and 30 percent greater than that of Japan,” he added. “Not only do we have some of the best workers, (we also have) the most skill. It’s also extremely cost-effective,” he said.

Santos noted the prevailing rent in the country of $26 per square foot per annum makes the Philippines one of the cheapest destinations to be in for a global company.

Rents in Hong Kong can go as up as $280, and that rate, Santos said,” drives the cost of everything.”

The BPO industry is seen to grow its revenues to $26 billion by 2016, which would be bigger than the projected $25 billion remittances from overseas Filipinos.

“The BPO sector is growing faster than remittances,” said Santos.

Santos said just like in India, the property sector in the Philippines is poised to bloom further because of the BPO sector.

Santos said the growth of the BPO seg­ment should “kickstart” the growth of other brick and mortar business as well.

“Based on what we see in India, it’s not just the BPO (that will benefit from the property boom), it will also kickstart the front ­office. You will see an exponential growth in a matter of years,” he added.

Santos said that among the industries that could take the lead from the BPO growth are insurance, medical, logistics/manufac­turing, environmental consultancy, food and beverage, banking and finances and electronics, among others.

By: Albert Castro, Malaya, April 3, 2014

Adchemy

Yesterday , we concluded the handover of our unit located on the 27/F of Philamlife Tower. It was a relief that we finally have access and can proceed with our minor refurbishments. Finally an official announcement can be given to our Engineers who really deserve a better facility that they can call their own.

Much of this good news and feelings of self-achievements of getting this unit would not be possible without your help and that of you most gallant employees, Mr. Francis Bautista and Mr. Philipp Llave.

Initially our head office in San Francisco was not in favor to get our own unit and moving out of Regus because of the initial capital outlay it represented. Eventually we were granted approval to start the search on the condition that it would be a tail-end of an existing lease, with no capital outlay needed for fit-out, cabling and furniture on our part. Knowing what the real estate market in the Philippines is like and our prior experience in finding office space, the situation proved very challenging, if not frustrating for us.

But with their professionalism, persistence and unique knowledge of the market, Francis and Philipp were able to find us a unit that fit the specifications of our head and negotiate a deal that was beneficial to us. To sweeten the deal further, the space they provided is just a few floors away from our existing office thus making it an easier transition for us.

Bottom line, what I am trying to say is “THANK YOU” to both most especially to Francis who’s been very instrumental on all my needs in terms of office spaces.

Keep up the good work guys!

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