Is it finally the time for urban centers outside of Metro Manila to experience their own property boom? With a growing young population in locations such as Clark, Mactan and Cebu, will more jobs available to them there in the next few years offer a more attractive living option?
CBRE Philippines, a real estate consultancy, says yes to both queries.
At the Euromoney Conference held recently at Solaire Casino and Resort in Parañaque City, Rick Santos, chair and founder of CBRE Philippines, said “We see expansionary growth in Metro Manila’s fringes and provinces such as Clark, Metro Cebu and Mactan.”
Special mention were Cebu Business Park at the Cebu IT Park, the Global Gateway Logistics Center in Clark and the Mactan Export Processing Zone in Mactan Newtown, locations that would attract more investors.
Requestion for expansion
CBRE added that the development of integrated, mixed-use centers outside of Metro Manila will drive business process outsourcing (BPO) firms and other global investors to continue their operations and expansion in the country.
CBRE Philippines explained to Inquirer Property: “There are other areas, but so far, these are the areas ripest for expansionary growth. The availability of labor, accessibility to the site and the availability of reasonably priced and properly suited office space as well as the availability of support services are the key factors that make these areas attractive for BPO locators.”
Santos said 70 percent of the country’s potential labor pool is located in these areas. He added that the need for a workforce with a higher level of English proficiency would make it even more convenient (for BPOs) to move from, rather than populate, the congested districts. “Developing these areas will provide more job opportunities for people within and in neighboring places,” he added.
Property analyst Enrique M. Soriano III previously told Inquirer Property that the office market would continue to grow, and demand would be dispersed out of the traditional central business districts in favor of new CBDs.
“Cebu, Davao and Iloilo will continue to book solid growth for as long as the local government leadership provides regulatory and marketing support,” said Soriano, Ateneo program director for real estate and senior adviser for Wong+Bernstein Business Advisory.
Considered the BPO lifestyle destination of Cebu, Clark and Mactan will provide work-play components similar to CBDs where workspace and facilities are developed alongside leisure elements such as restaurants, parks, recreational establishments and retail choices.
Best prospects
CBRE added that with BPO revenues projected to reach $16.5 billion this year, the industry will propel rising demand for quality office spaces. However, with 75 percent of these companies already located in Metro Manila’s CBDs and as vacancy rates drop below 3 percent, investors are looking into development and expansion opportunities outside these areas.
On a global scale, Metro Cebu is ranked in the top 10 outsourcing destinations. Clark is also emerging as one of the best prospects in BPO lifestyle developments, with most of its infrastructure left in good condition by the former US bases. In addition, competitive rates in these areas will further attract foreign BPO investors.
Other expanding business operations seen to drive demand are from banking and finance, insurance, medical, logistics and manufacturing, and computer and hardware electronics.