MANILA, Philippines - The excess supply of office space in Metro Manila created by the global financial crisis as early as 2008 will be absorbed mostly in the first half of 2010 as the business process outsourcing sector continues to grow, observed Lindsay Orr, chief operating officer of global property consultancy firm Jones Lang LaSalle Leechiu (JLLL).
Studies by JLLL, which has acquired over a hundred sites in the Philippines for at least 30 contact center clients, remain confident that a significant portion of the additional 315,221 sqm. of office space coming on-stream from January to June this year will be absorbed by BPOs that remain bullish about doing business in the Philippines. This is in addition to the 575,446 sqm. of office space that was constructed in 2009. “This will cause office prices to bottom then start moving up perhaps by the end of the second quarter of 2010,” he noted.
Orr further observed that more BPOs are moving out of the Makati CBD and into emerging business districts like Bonifacio Global City and even office developments in Quezon City and Makati’s Pasong Tamo, driven by the highly competitive nature of the BPO segment. The strategic location of Bonifacio Global City accessible to the rich labor pools of Quezon City, Pasig and Parañaque has made it a preferred BPO location.
Sheila Lobien, JLLL associate director, for example relates that office towers like the 24,653 sqm. Fort Legend launched in February last year is now 100 percent occupied and includes BPOs and traditional multinational companies as occupants. “Our clients realize that giving employees easy access to and from work helps in employee retention,” she explained. The 29-story PEZA-accredited building with a penthouse is near St. Luke’s Medical Center and the proposed Shangri-la Hotel property.
Orr disclosed the business community has welcomed Bonifacio Global City as a viable place for doing business. Real estate developers including The Net Group are confident of the demand for this area and will be completing its new office project, Net Lima, in the third quarter of 2011. At 50,000 sqm., Net Lima will be the largest office building built in the past two years, the first prime grade office building in Bonifacio Global City. The last prime grade office building in the Philippines was built in 2001.
Phillip Anonuevo, JLLL associate director, explained that BPOs have also began testing sites in Quezon City with superior access to major transportation lines and a lifestyle and retail area. A call center, IT-related BPO and multinational finance institution are among the occupants of Eton Cyberpod Centris on the corner of Quezon Avenue and EDSA. It is 53 percent occupied. Its eight floors of office space is part of a 12-hectare township envisioned as a self-contained community including commercial, residential and office areas. Its “big-city vibe” and direct access to the MRT station at Quezon Avenue make it attractive to BPO employees, he said.