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BPO Sector to Make an Epic Comeback in 201
This is as per the real estate veteran and president of property consulting firm Leechiu Property Consultants (LPC), David Lecchiu, who foretold that office space take-ups in the metro in the coming year could an all time high of 800,000 to 850,000 square meters (sqms) as compared to 750,000 sqms this year.
Luchiu stated in an interview that rent fees for Philippine Economic Zone Authority (PEZA)-accredited infrastructures in Metro Manila may have a 10-15%, while non-PEZA accredited ones with e-gaming tenants may still pitch a 10% increase in their rent fees.
If the above is to happen, Luchiu stated that Manila would the third largest office space market in the continent after Shanghai and Beijing.
Presently, LPC is helping some of the world's biggest companies to set up their services hubs in the country, which easily took 100,000-130,000 sqms this year alone. Leechiu also stated that these include some of the top 20 companies worldwide in terms of capitalizing the market and were freshly diving into the Philippine market.
In addition, Leechiu stands firm that for the coming year, the BPO industry may maintain the strong office take-up as observed in the past years. Last year, the industry was able to fill 480,000 sqms of office space corresponding to 77% of the total property deals but from January to November this year, the industry only took 350,000 sqms, a 38% drop and only corresponding to 48% of this year's total transactions.
Reports have shown that BPO sector's slowdown this year is due to the socio-political differences of western countries with that of the Philippines', challenges in making establishments PEZA certified, tax reform issues, and other security risks.
Despite all aforementioned issues, however, Metro Manila's office take-up is expected to end on a positive note this year, amassing to about 750,000 sqms. As of the latter part of November, the total take up in the metro was 738,305 sqms, 16% higher as compare to last year's.
With Philippines reestablishing its relationship with the US, Leechiu stated that the BPO sector will experience a stronger flow of prospects and investors next year. In the addition, the bicameral version of the Philippine tax reform program is seen to appeal to the BPO industry, dispelling the former issues on a shift on fiscal regime.
With regards to real estate and office space take-ups, Coefficients Co ltd has established their own 3-storey building to accommodate more client projects and prospective partners or investors. Coefficients Co Ltd. also has a partner in Marikina, Marseri, which also expanded their office take-up due to the increasing number of projects.
In 2018, LPC is seeing that the BPO sector would likely occupy about 485,000 to 500,000 sqms of office space in Metro Manila alone. E-gaming is projected to occupy around 280,000 sqms while other sectors will likely account for 20,000 to 30,000 sqms as the government loosens foreign ownership limits in different industries.
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