The business process outsourcing (BPO) industry is seen to continue driving demand for office space this year, a top executive of a property consultancy firm said Tuesday, January 30.
“The Philippine BPO sector will continue to thrive in the coming years,” Santos Knight Frank chairman and chief executive officer Rick Santos said in a media briefing.
“The country provides a conducive environment for foreign investors — an excellent pool of low-cost skilled labor, outstanding customer service, a quality destination, and one of the cheapest rental rates and highest yields in Asia,” Santos added.
He also said that with uncertainties in policies due to the tax reform program of the government, industry players would remain vigilant for changes that could impact negatively their business.
Nevertheless, he said BPO companies remained attracted to the Philippines as their investment destination with its young and competitive talents in the industry.
Santos Knight Frank senior director for occupier services and commercial agency Morgan McGilvray said that office take-up in 2017 increased by 25 percent to 675,000 square meters compared to net absorption in 2016.
On the supply side, McGilvray said about 1.4 million square meters of leasable space in the office market was expected to be added this year.
About 40 percent of these leasable office spaces will be in the Bonifacio Global City area.
He added that approvals of IT parks and centers by the Philippine Economic Zone Authority (PEZA) are also expected to pick up this year.
On the other hand, lease rates in the office market have been increasing by an average of 5 to 6 percent annually since 2010. McGilvray noted this trend as a sign of robust demand in office space.
With the continuous demand for office space this year, demand for retail space is also expected. Retail take-up last year was stable with most of available spaces had been already pre-committed. — Kris Crismundo (PNA)