Stronger BPO in PHL to result in more office market

Share

Balita.ph

By Kris M. Crismundo

Jun 7, 2013

 

MANILA, June 7 (PNA) –- As the business process outsourcing (BPO) industry is growing stronger in the Philippines, it will demand for more office spaces in the country particularly in Metro Manila, according to CB Richard Ellis (CBRE) Philippines.

CBRE Philippines, the country’s leading commercial real estate services advisor, said in its Mid-Year Conference on Wednesday that there is a growing market for office spaces as BPO companies continue to invest and expand their business in the country.

Recently, it was reported that BPO employees in Philippines exceeded 700,000 in 2012. With this number, it is projected to take up 450,000 square meters office in Metro Manila alone for this year.

Using the projection of Business Processing Association of the Philippines (BPAP) that BPO employees will have a 25 percent growth rate, it will reach 1.3 million employees in 2016. Hence, expansion of offices is needed in the coming years.

As the number of BPO employees set to double in 2016, a total of five million square meters office space is needed to sustain the business.

CBRE Vice Chairman Joey Radovan explained BPO firms plan to locate themselves in areas which offer the lowest lease rates. This is the reason of BPO companies coming to Philippines since rental rates in the country is lowest among neighbors in the region.

Radovan mentioned business districts that have high occupancy rate and large number of asking lease rate. Among these business districts are Makati with 94.93 percent occupancy rate and 890 average asking lease rate; Fort Bonifacio (Taguig City) with 98.99 percent occupancy rate and 764 average asking lease rate; Ortigas (Pasig City) with 94.96 percent occupancy rate and 557 average asking lease rate; Alabang (Muntinlupa) with 98.69 percent occupancy rate and 585 average asking lease rate; and Quezon City with 99.18 percent occupancy rate and 582 average asking lease rate;

Of the business districts, Makati remains with the highest lease rates since it offers the highest quality Grade A and premium office buildings available in the market.

Makati is considered having the lowest prime rental rate for office spaces in Asia. Rental rate in Makati costs US per square feet per annum compared to Bangkok’s US$ 32/sq. ft/annum, Singapore’s US$ 100/sq. ft/annum, Tokyo’s US$ 141/sq. ft/annum and Beijing’s US$ 179/sq. ft/annum.

However, Fort Bonifacio is now an alternative for Makati in terms of office spaces because it offers lower lease rates than Makati.

Lowest rental rates for office spaces in Metro Manila are located in Ortigas, Alabang and Quezon City.

With the higher market demand on the next few years, CBRE mentioned the upcoming supply in office spaces in different districts.

Fort Bonifacio has the highest supply having 300,000 m2 this year, 181,000 m2 in 2014, and 218,000 m2 in 2015.

Ortigas with 91,000 m2 this year, 68,000 m2 in 2014, and 35,000 m2 in 2015.

Quezon City has 63,000 m2 this year, 191, 000 m2 in 2014, and 34,000 m2 in 2015.

Alabang has 55,000 m2 this year, 46, 000 m2 in 2014, and 38,000 m2 in 2015.

Makati has the lowest supply with 39,000 m2 this year, 50,000 m2 in 2014, and 14,000 m2 in 2015.

Thus, roughly 1.4 million square meters of office spaces is anticipated to enter the market from 2013 to 2015.

Aside from BPO offices seeking to rent spaces, CBRE noted that office spaces demand drivers are seeking corporate headquarters, entry and expansion of high-value companies, expansion in occupier demand, relocation of tenants and flight-to-quality of tenants. (PNA)

Source: http://balita.ph/2013/06/05/stronger-bpo-in-phl-to-result-in-more-office-market/

Orion Support Incorporated (OSI)

Dear Rick,

Following up from my initial request to you for support in finding a new office location for our company, Orion Support Incorporated.   Well, we moved in to the LTA Building on Perea Street, fifty meters or so from Paseo de Roxas this weekend, only a 4 minute walk to AmCham and under excellent terms.

While I think you assigned both Morgan Mcgilvray and Sherdil Rana to support our original request; as you know, Morgan was very tied up with his wife giving birth during the period we identified this location and negotiated with the landlord, Mr. Mike Arroyo. Yes, the former First Gentleman. But in my short interaction with Morgan, I can see that he is a solid, young professional.

With regards to Sherdil, I want to tell you that with 35+ years of interviewing hundreds and hundreds of individuals, I was impressed with his professionalism, focused support and “can-do” attitude  from the point of identifying our potential office space, and through the negotiation stages prior to the signing of our 6 year contract.  I was impressed with his considered opinions, insightfulness with regards to Philippine business culture and his sage advice related to our strategy in the negotiation process.  Sherdil was able to negotiate a rental rate per square meter about 150 – 200 pesos less than the going rate in this area, and with only a 7% increase after 24 months. Add to that, he secured for us three parking slots at no additional cost, two months security deposit versus the standard three, and two months advance rent to be applied to the front end of our contract versus the back end as is the case in most rental contracts. And, he got the landlord to repaint the entire office with three coats of mildew resistant paint at their expense.   But best of all, we were given a 6 year lease, with only having to give two months notice and forfeit only our two month security deposit to move out anytime with no additional penalty!

JOIN THE CBRE COMMUNITY

Receive our latest industry research, news and updates by signing up.

Want to Unsubscribe?

Contact

Manila Office

10F Ayala Tower One & Exchange Plaza
Ayala Triangle, Ayala Avenue, Makati City
1126 Philippines

T +632 752 2580 | F +632 752 2571
ricksantosteam@cbre.com.ph

Cebu Office

Unit 1505, 15th Floor, Ayala Life - FGU Center
Mindanao Avenue,Corner Biliran Road
Cebu Business Park, Cebu City
6000 Philippines

T +032 318 0070 | +032 236 0462
ricksantosteam@cbre.com.ph

Contact Us | Sitemap | Disclaimer/Terms of Use | Privacy Policy | © 2012 CBRE Philippines, Inc. All rights reserved: Part of the CBRE Affiliate Network

For inquiries, fill up the form below.

Name

Email Address

Subject

Message

For inquiries, fill up the form below.

Name

Email Address

Subject

Message

For inquiries, fill up the form below.

Name

Email Address

Subject

Message

Share

We would like to hear from you on how we can serve you better. Please fill out the form below and we will get back to you as soon as we can.

Name

Email Address

Subject

Message