Demand from BPO and home buyers to buoy property sector — CBRE Philippines

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Siegfred O. Alegado

GMA News Online

23 January 2013

http://www.gmanetwork.com/news/story/291610/economy/business/demand-from-bpo-and-home-buyers-to-buoy-property-sector-cbre-philippines

Demand for commercial space, particularly from business process outsourcing (BPO), will remain the driving force behind real estate as an industry and supported by a broader market of residential buyers, property consultant CBRE Philippines said Wednesday.
The situation is evolving at a time when the Philippines is fast becoming a global lifestyle hub and Metro Manila is challenging other gaming cities like Macau and Las Vegas.
“Fiscal dilemma in the US will push more business process outsourcing to the Philippines,” said Rick Santos, CBRE Philippines chairman and chief executive officer. Santos also cited the strong pre-leasing commitments, with the BPO sector accounting for 80 to 90 percent of total office space and taking up at least 4.5 million square feet annually.
“The Philippines will remain as one of the most cost-effective office destinations in Asia,” he added.
Joey Radovan, CBRE Philippines vice chairman and global corporate services head, noted that BPO in the past decade has been the source of demand for office spaces in the country and “will remain so for the next five years. Developers will continue to build spaces for them.”
In the next three years, Radovan said a chunk of the available space will be in Ortigas area, Fort Bonifacio, and Quezon City.
And then the supply would largely come from the “next wave cities” of Baguio, Iloilo, Dumaguete, Davao, Cagayan de Oro, Bacolod, Sta. Rosa, Lipa, Cavite, and Malolos. “These are places where BPO firms are looking at putting up office spaces,” Radovan said.
Empowering the residential market
Empowering the market for residential developments is the higher disposable earnings of the mid-income segment, with the demand for homes thriving in a low interest rate regime, CBRE Philippines noted.
“The Philippines is expecting democratization in the housing sector – from a notion of renters to owners – based on low interest rates,” Santos said.
“An empowered consumer-base economy will continue to fuel retail developments in the country,” he added.
Victor Ascuncion, CBRE Philippines executive director, sees the strongest segment of the property sector as the “condominium units priced above P100,000 per square meter… with 76 percent of the total supply in this price range have already been sold.”
There is a “60 percent take-up on projects that are launched,” he added.
An emerging trend in the residential and office sector, known as lifestyle housing and lifestyle BPO destinations, integrates office, lifestyle, and retail spaces, according to CBRE Philippines.
“These will be an alternative for BPO site selection and office developments outside of Metro Manila,” Santos said.
The gaming challenge
“We think the Philippines will really challenge Macau and Las Vegas in gaming revenues in five years time,” Santos noted.
Entertainment City Manila in Pasay City will notch $10 billion in revenues by 2016 from $1.3 billion in 2011, according to CBRE Philippines.
“Leisure destination properties will be acknowledged for their tourism marketability and investment potential,” said Liz Silvestre, CBRE Philippines associate director.
“The country will experience strong global luxury trend of foreign tourists brought about by the islands’ recognition and more aggressive government campaign,” she added.

Energizer Philippines

Dear Rick,

I’d like to thank you and your team – Joey Radovan and Morgan Mcgilvray in particular, for the assistance given to us during our recent Office Relocation process.
They were very well organized and helpful:

- Our site visits were conducted in a very timely manner and my management committee received clear and useful guidance on various aspects related to site selection –from what to look for in terms of building services, location, etc., as well as guidance on the discussion etiquette they should observe in order to safeguard the confidentiality of issues that could be valuable at the time of final selection and negotiation of the site.

- Both assisted us in the selection of the Office Design and Construction supplier; they were present in all the presentations and gave us objective feedback and opinions that helped my team feel more educated and confident about the decisions they were making.

- We also received guidance with various topics that arouse secondary to our office relocation, such as off-site document storage options just to name one example.

- They continued their liaison and support with the landlord and constructors throughout the process of negotiating and signing the lease, as well as during a very tight construction and relocation schedule during which a lot little (important) issues arise that must be solved swiftly in order to keep the deadlines.

The above is by no means a comprehensive list, and I’d like to extend our thanks to your team who supported Joey and Morgan in giving us such excellent service.

We are now pretty much settled in without any business interruption and with our colleagues quite happy about our new office and location; do come to visit us when you get a chance!

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